Monetary Policy Framework in the UK - Essay Example

Only on StudentShare

Extract of sample
Monetary Policy Framework in the UK

This essay stresses that there are a number of guiding principles like price stability, exchange stability, full employment and maximum output and a high growth rate etc, in framing the Monetary Policy for an economy.
This paper declares that the monetary policy of any country refers to the regulatory policy, whereby the monetary authority maintains its control over the supply of money for the realization of general economic objectives. This involves manipulating the supply of money, the level and structure of interest rates and other conditions affecting the availability of credit. However, in the context of developing economies monetary policy acquires a wider role and it has to be designed to meet the particular requirements of the economy. This involves not merely the restriction of credit expansion to curb inflation, but also the provision of adequate funds to meet the legitimate requirements of industry and trade and curbing the use of credit for unproductive and speculative purposes. The monetary policy of an economy operates through three important instruments, viz. the regulation of money supply, control over aggregate credit and the interest rate policy. Economic growth is dependent on mobilizing savings and directing them into productive channels. In this process, money supply can only play a limited role. However, the role establishes an important connection between money supply, output and price level ...Show more

Summary

This essay talks about monetary policy which is an important aspect of overall macro-economic policy. To influence economic conditions or to achieve economic objectives, monetary authorities employ various techniques. Monetary Policy can be broadly defined as “the deliberate effort by the Central Bank…
Author : keyshawn84
Monetary Policy Framework in the UK essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Monetary Policy Framework in the UK"
with a personal 20% discount.
Grab the best paper

Related Essays

Monetary Policy and the Stock Market
The present paper attempts to assess the extent to which monetary policies are influenced by fluctuations in stock market index values. Many papers have found that the extent to which monetary policymakers react to stock market changes are often driven by other factors such as the rate of inflation and output gap.
24 pages (6000 words) Essay
UK monetary policy
Monetary policy also involves controlling the changes in the value of exchange rate. This is because currency fluctuations affect the macroeconomic activity in a country. According to the international monetary fund, the bank of England appears to be nimble when it comes to easing the monetary policy in the United Kingdom.
10 pages (2500 words) Essay
Explain the Legal Framework for the Bank of England's Monetary Policy
If you are unsure of any of the above please check at the Business School Student Centre Reception. Student Number (s): 0843375 Programme:(e.g. Business Management) Business Economics Module Title: (e.g. Studying for Business) Monetary Economics Seminar Group 1 Module Code: FE3011 Word Count 1,564 I confirm that no part of this assignment.
6 pages (1500 words) Essay
Monetary policy
This starts from the macro and the micro levels of the economy (Stationery Office, 2006 p. 34). The economic stability of a country/state depends on the effectiveness of economic policies advanced in order to regulate the fiscal activities within the country and at the international levels.
8 pages (2000 words) Essay
MONETARY POLICY IN EMU European Monetary Union
The main area of working of the Union is the formulation of the larger monetary objectives of the Eurozone, especially for the member countries, however deliberation over and influencing of financial proceedings is also part of the portfolio of the Union.
6 pages (1500 words) Essay
Fiscal and Monetary Policy
(Farinha & Marques 2001). The government often employs fiscal policy, monetary policy or a combination of both to sway the economy back to an equilibrium position. The manner in which the government employs both policies may result to either fiscal or monetary dominance.
10 pages (2500 words) Essay
Monetary Policy Framework in the UK
For economic growth, there is need to have effective monetary policies. In this regard, the bank plays crucial role in ensuring that there are monetary polices that are aimed at monetary stability. This includes the stability in price and confidence of the economic.
10 pages (2500 words) Essay
Effectiveness of Monetary Policy for the UK
Monetary policy can be either a contractionary policy or an expansionary policy. (Kenen, 1995) Contractionary policy will decrease the total money supply thus raising interest rates a thing that helps in reducing inflation while the expansionary policy increases the total supply of money in a given economy thus commonly used in eradicating unemployment in periods of recession by lowering interest rates.
8 pages (2000 words) Essay
UK Fiscal and Monetary Policy
Monetary policy is the attempt to control macro economic variables in an economy (primarily inflation) through the use of interest rates. In Britain, the target of monetary policy is to keep inflation within a target of CPI (consumer price index ) of 2% +/-1.
4 pages (1000 words) Essay
Should monetary policy be boring and has this been the case for the UK and the USA over the last ten years
and UK in order to achieve a constant economic growth despite the external factors that affect these countries’ economic activity. The current major external factor that affects the activity of U.S. and UK is the long-term effects
8 pages (2000 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT