Course work in macroeconomics

Chapter 2: National monetary policies in developed economies…………… 14

2.1 Monetary policy in the USA .................................................................... 16

2.2 Analysis of the impact of Russian monetary policy instruments on its economic growth ...……………………………………………………….…….. 19 2.3 Economic developments and monetary policy responses in Japan ....................................................................................................................... 21

Conclusion .................................................................................................... 26

References ……............................................................................................. 28


Introduction.

Monetary policy one of the main directions of the county`s economic regulation policy is calculated. Its object is the demand for money and the supply of money is calculated. Therefore, inflationary processes in the country to prevent the economy from deepening meeting the demand, credit of the population and businesses increase the use of loans from institutions, the national currency Monetary policy plays an important role in ensuring exchange rate tability. The main goal of the central bank is the stability of the national currency through the monetary mechanism of the economy regulates. In such circumstances, the Central Bank is definitely a money-lender uses interest rates as the main tool of the mechanism. At the macro level with the reduction of inflation in the country stability is achieved and the nominal interest rate and trade in the financial market. The rates on active operations of banks will also decrease. Inflation has been curbed by commercial banks in recent years has a positive effect on deposit and loan interest rates. In particular, trade interest rates set by banks on loans and deposits and interest rates in the interbank money market are declining. The stage of interest rate formation in each country is the country determined by the level of development of the economy. Central Bank rapid to the formation of interest rates through operations in the financial market affects. Execute transactions in financial markets liquid assets management in commercial banks is achieved by increasing. In this situation segmentation of profitable assets of commercial banks and banking securitization of assets is achieved.

Monetary policy is an economic policy that manages the size and growth rate of the money supply in an economy. It is a powerful tool to regulate macroeconomic variables such as inflation and unemployment. Or according to several economists, for example, Jim Chappelow said: “Monetary policy, the demand side of economic policy, refers to the actions undertaken by a nation's central bank to control money supply to achieve macroeconomic goals that promote sustainable economic growth.”, or K. Suman said: “Monetary policy is concerned with the changes in the supply of money and credit. It refers to the policy measures undertaken by the government or the central bank to influence the availability, cost and use of money and credit with the help of monetary techniques to achieve specific objectives. Monetary policy aims at influencing the economic activity in the economy mainly through two major variables, i.e., (a) money or credit supply, and (b) the rate of interest.” According to A. J. Shapiro, “Monetary Policy is the exercise of the central bank’s control over the money supply as an instrument for achieving the objectives of economic policy.” In the words of D.C. Rowan, “The monetary policy is defined as discretionary action undertaken by the authorities designed to influence (a) the supply of money, (b) cost of money or rate of interest and (c) the availability of money.”¹