Taking a Look at Monetary Policy

801 WordsJan 30, 20183 Pages
MONETARY POLICY In the last two decades, the rapid financialization has brought increasingly frequent and widespread economic crisis in the world economy. These crises have originated mostly from the financial markets, then downsizing and recession has emerged in the real economy. The response to the economic crisis in the first place was realized through monetary policy. However, because of a long period of crisis, its affects to many countries and during the crisis the monetary policy implemented does not create the expected impact, central banking and monetary policy has led to the proliferation of criticism. Thus, together with the crisis of the monetary policy implemented by the central bank theoretically has undergone transformation. Occuring transformation very quickly in the field of monetary policy and central banking stems from the fast development of financial markets and economic activity at the national level in many international qualification. Performing of monetary policy has become increasingly difficult in the triangle of inflation, production and finance. In an economy monetary policy is being changed exchange policies intended affecting the total volume of money and credit activity by the central bank. Organization in charge of conducting monetary policy is the Central Bank in a country. For this purpose, for example, preventing unemployment or inflation to domestic economic stability, external payments deficit or surplus in the form of external
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