Monetary Policy
Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment.
Framing the monetary policy is a very complicated and difficult task as balance has to be maintained between different economic variables. A tradeoff usually has to be made between these economic variables. Policymakers often make use of monetary rules like Friedman's k-percent rule or the Taylor rule to design more effective monetary policies.
Read more about this topic: Friedman's K-percent Rule
Famous quotes containing the words monetary and/or policy:
“There is no legislation—I care not what it is—tariff, railroads, corporations, or of a general political character, that all equals in importance the putting of our banking and currency system on the sound basis proposed in the National Monetary Commission plan.”
—William Howard Taft (1857–1930)
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—Ben Hecht (1893–1964)