Notes On Monetary And Monetary Policy Essay

1525 Words7 Pages
FROM MONETARY TARGETING TO INFLATION TARGETING BY DAVID EYO USANG 138581

List of Abbreviations
CB Central Bank
ECB European central bank
FEDS The federal reserves
MP Monetary Policy
IT Inflation Targeting
MT Monetary Targeting
M1 Narrow money
M2 Intermediate money
M3 Monetary aggregates 3
MB Monetary Base
MS Money Supply

INTRODUCTION
For decades, high inflation has always been a potential threat to the macroeconomic stability and long-term economic growth in the world. Central banks have been modelling strategies to tackle the general price instability in an economy. Different models have been adopted to predict general price levels, maintain a favorable inflation rate and promote economic growth. This can be achieved by ensuring that the economic variables are properly regulated by committed and reliable financial institutions in a state. Getting the model and monetary policy right is crucial for the health of an economy. Overly expansionary MP leads to high inflation, which
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