Four Lectures on Central Banking By Arthur Grimes Pdf
Download Four Lectures on Central Banking By Arthur Grimes Pdf book free online – from Four Lectures on Central Banking By Arthur Grimes Pdf book; This lecture note explains the following topics: Inflation Targeting: 25 Years? Experience of the Pioneer, A Floating Exchange Rate is the Worst Exchange Rate Regime, How Prudent are Macroprudential Policies, Responsibility and Accountability in the Financial Sector.
The central bank will optimally choose, and commit to, zero inflation, and this is a credible commitment since there is no incentive on the central bank to renege given that its preferences are independent of all other outcomes. Hence inflation and inflation expectations are both zero, and unemployment equals the natural rate
Transparency and accountability was bolstered by making a single individual, the Governor, responsible for the conduct of monetary policy. The Governor is subject to formal oversight (but not control) by the Bank’s Board of Directors, and is subject to informal oversight by the markets and media. These arrangements enable the Governor both to implement current monetary policy decisions and to provide forward guidance on future monetary policy decisions that does not have to be tempered by a committee consensus. Forward guidance on interest rates, which commenced in 1997, enhances the transparency of the Bank’s implementation of monetary policy.