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Global financial architectures, including central banks and their monetary policies, are critical to leveraging transformative change for climate justice. Yet, currently central banks are exacerbating rather than mitigating the climate crisis and climate injustices. By following a neoliberal policy paradigm and narrowly interpreted mandates for price stability and financial stability, central banks are focusing on stabilizing a system that is inherently unstable. This accelerates climate chaos around the world and is worsening future financial instability. Recognizing both the potential of central banks to advance climate justice and the inattention of the role of central banks in the climate crisis, this paper contributes to the emerging field of financial innovation for climate justice. First, we review what central banks are currently doing to advance and hinder climate justice. Then we explore monetary policy tools that central banks could deploy for transformative climate justice. We then make the case for 'creative disruption' in monetary policy which requires expanding the narrow mandate of central banks and new kinds of global coordination. This call for intentional creative disruption changes policy assumptions regarding financial stability and climate politics and reconceptualizes how to achieve transformative systemic change to move toward a more equitable, just, healthy, sustainable future. [ABSTRACT FROM AUTHOR]

In recent years, fiscal policy in the Eurozone (EZ) has faced challenges posed by the strong and rapid increase in inflation as a consequence of the COVID-19 pandemic and other geo-political crises. Due to the fear of "fiscal inflation" present during episodes of fiscal stimulus during the pandemic crisis, this paper assesses the relationship between discretionary fiscal policy and inflation in developed EZ economies, taking into consideration the rise in energy prices as a control variable. This study considers the econometric framework of heterogeneous, non-stationary panels (Pooled Mean Group (PMG) and Common Correlated Effects Mean Group (CCEMG) estimators). Using quarterly panel data for the period 2015q1–2024q1, the results show that, in the long run, the effects of fiscal policy on inflation are insignificant. However, covering only the pandemic and other geo-political crises (2020q1–2024q1), research shows a significant negative long-run relationship between fiscal expenditure and inflation and heterogeneous short-run fiscal adjustments due to the lack of a fiscal union in the EU economies. Hence, accompanied by monetary policy, the discretionary response of fiscal policy to inflationary shock was oriented in the same direction—the reduction in inflationary pressures during a geo-political crisis. Fiscal policy mitigated inflationary pressures in these recent crises, while in the long run, it did not affect nominal variables, indicating that there is no evidence of fiscal inflation in the sample of EZ economies during a stabilization period or under crisis conditions. [ABSTRACT FROM AUTHOR]

The natural interest rate plays an important role in shaping monetary policy and guiding economic decisions. This paper estimates the natural interest rate for Turkey using three different econometric approaches: structural VAR (SVAR), reduced form, and Hodrick-Prescott (HP) filter. The paper provides a comprehensive analysis of the dynamics of the interest rate differential in Turkey using data for the period 2006-2023. While the reduced-form approach and the HP filter indicate the existence of a significant real interest rate gap in certain periods, the SVAR approach reveals a relatively smaller real interest rate gap due to the procyclicality in the estimation process. On average, the natural interest rate forecasts from all three methods are comparable, but the SVAR and HP approach yields higher forecasts than the reduced-form approach. Moreover, the volatility of the real interest rate spread is the lowest in the SVAR approach. Given the volatility of the natural interest rate, these results emphasize the importance of adopting an active monetary policy to maintain price stability and to take into account the natural interest rate in policy decisions. [ABSTRACT FROM AUTHOR]

Copyright of International Journal of Disciplines Economics & Administrative Scienves Studies is the property of International Journal of Disciplines in Economics & Administrative Sciences Studies and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Interactions between monetary and macroprudential policy are crucial in safeguarding price and financial stability. This study investigates the macroeconomic and financial impacts of monetary and macroprudential policy interactions in South Africa, a leading African economy in developing macroprudential frameworks. The existing literature largely focuses on the effectiveness of these policies independently, leaving a gap in understanding how their interaction affects their overall efficacy. Employing a Structural Vector Autoregression (SVAR) model and utilizing data from 1980 to 2023, this study uniquely incorporates the financial cycle to represent financial developments. The results reveal significant effects of both policies on key variables such as output, the financial cycle, and the price level. Specifically, policy contractions reduce output and the financial cycle but increase the price level, illustrating the 'price puzzle'. This study further identifies an endogenous response between the two policies: monetary policy reacts by rising to reduce price levels following a macroprudential shock, while macroprudential policy rises to stimulate financial activity after a monetary shock. These findings underscore the importance of using both policies in conjunction but in opposite directions to balance their effects and achieve price and financial stability. This study suggests that an optimal combination of monetary and macroprudential policies is critical for maintaining macroeconomic equilibrium. [ABSTRACT FROM AUTHOR]

This study examines the conduct of optimal fiscal and monetary policy in Nigeria under the assumption of a rent‐seeking government. To answer this question, a Dynamic Stochastic General Equilibrium (DSGE) model featuring a rent‐seeking fiscal authority is calibrated. The study also conducted a sensitivity analysis to compare the welfare effect of optimal simple policy rules under a corrupt versus benevolent regime. The results from the study showed that optimal monetary policy should target the double mandate of price and output stabilization when the government is a rent‐seeker. The study also found that it is optimal for the Central Bank to commit to an active monetary stance. The optimal fiscal policy rule in a rent‐seeking economy is passive and pro‐cyclical. Furthermore, welfare is negligibly better off in the benevolent economy. From a policy perspective, rent‐seeking activities are triggered by the proportion of rent‐seeking agents. This induces inefficiencies in government spending, which constrains growth in a developing economy. Furthermore, rent‐seeking can "coerce" the Central Bank of Nigeria to focus on a double mandate to stabilize both prices and output. Therefore, it is desirable for the monetary authority to possess due independence in controlling prices without interference from the fiscal authority. [ABSTRACT FROM AUTHOR]

This study aims to investigate the factors influencing inflation in Turkey between 2006:1-2023:11, taking into account the structural changes that occurred during periods of significant economic, political and geopolitical turmoils. For this purpose, we employ the Hacker and Hatemi-J (2006) bootstrap causality test along with the Fourier Toda-Yamamoto bootstrap causality to capture structural changes. Our findings indicate that when structural changes are taken into account, the drivers of inflation are monetary factors such as the money supply and exchange rate. Furthermore, an exogenous factor such as the oil prices is not a determinant of inflation, suggesting that inflation is a domestic factor. Given these findings, the study emphasizes the importance of strong and stable monetary policies in Turkey to control inflation and achieve price stability. [ABSTRACT FROM AUTHOR]

Copyright of Boletín Económico de ICE is the property of S.G.E.E.I.P.C., Secretaria de Estado de Comercio, Ministerio de Industria, Comercio y Turismo and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

In the conditions of military actions, liquidity of the currency market is of critical importance for the financial stability and security of the state, which stipulates significant relevance of the issue of instruments of liquidity provision. The research aims to identify the influence of the instruments of the National Bank of Ukraine (NBU) on the liquidity of the currency market of Ukraine within the context of long-term military conflict. The methods of regression analysis, correlation analysis, and analysis of variance were used in the study to determine the leading factors that influence the liquidity of the currency market in Ukraine in the conditions of military conflict. The study of the liquidity of the currency market through the prism of linear regression reveals the relation between the core economic indicators and the level of liquidity of the currency market during the military conflict. The model with a coefficient of determination 0,774 was found to effectively describe 77,4% of liquidity variability, underlining the significant influence of such factors as central bank policies and macroeconomic conditions. Significant coefficients for central bank interventions (1,7867), regulatory measures (59,8199), volume of international aid (-1,5684) and inflation (-99,9780) indicate their influence on the liquidity of the currency market in the conditions of military conflict. The influence of regulatory measures with a correlation of 0,59 is especially important. The article emphasises the necessity for minimising dependence on external financing and inflation control through monetary measures to ensure price stability. Further study perspectives involve consideration of the influence of digital currency of central banks on the liquidity of the currency market. [ABSTRACT FROM AUTHOR]

During the 1990s and 2000s, many developing nations accepted fixed exchange rate regimes to sustain price stability. By pegging their currencies to an anchor currency (i.e. US dollar), developing countries could bring credibility and confidence into their economies. The study tries to analyse the impact of the pegged exchange rate regime on inflation in BRICS countries for the period spanning from 2003 to 2022. The result points to the loss of monetary policy autonomy due to the ‘impossible trinity’ coming into play with a steady increase in capital inflows. The country’s large trade surpluses and extensive trade relationships may buffer the impact of exchange rate fluctuations on domestic prices, as changes in the exchange rate may be absorbed by changes in trade volumes or pricing strategies. Other factors like demographic trends or government interventions in markets could overshadow the influence of the exchange rate regime on inflation. The impact of changes in the exchange rate regimes on inflation may operate with lags, meaning that any effects may not be immediately observable in the data. The analysis in this study proposes that exchange rate regimes choice and money supply influence the inflation dynamics in the BRICS countries. It merely reflects the success of the central bank in neutralizing its very effort of maintaining the pegged rate, which gives rise to inflationary growth of the money supply. [ABSTRACT FROM AUTHOR]

This paper examines how monetary policy can be calibrated to promote a greening of finance. The paper reviews existing literature and notes a tendency to either focus narrowly on one policy instrument or provide a menu of options, without much depth or discrimination. This Perspective paper undertakes a theory-based analysis of green monetary policy options using an institutional approach to monetary economics. In so doing, it identifies a policy mix that would reorient finance by structurally modifying the relative incentives of financing green vs dirty assets. More specifically, the proposed green central banking strategy consists in the combined adoption of several, recalibrated monetary policy instruments. The two main ones are core elements of central banks' collateral policies: making (more) green assets eligible in credit operations with central banks and using so-called 'haircuts' to give green assets preferential treatment over dirty assets in those credit operations. Combined, the adoption of the proposed, recalibrated instruments promises to reorder the collateral asset hierarchies that are the backbone of modern financial systems, providing strong financial incentives for enhanced financing of investment in green assets and divestment from dirty assets. Monetary policy can help speed up a greening of the financial sector. Enhanced financing of green assets, as well as divestment from dirty assets, can be incentivized through a range of monetary policy tools. Among the most potent green monetary policy tools is differentiated treatment of green and dirty assets in credit operations, known as collateral policy. Several green monetary policy options can be pursued without compromising other monetary policy objectives (such as price stability). While most central banks currently remain reluctant to engage proactively with such policy tools, the increasing manifestation of climate change is likely to erode such resistance in coming years. [ABSTRACT FROM AUTHOR]

With climate change increasing the frequency and intensity of natural disasters, what should central banks do in response to these catastrophic events? Looking at IMF reports for 34 disaster‐years, which occurred in 16 disaster‐prone countries from 1999 to 2017, reveals lack of any systematic approach adopted by monetary authorities in response to climate shocks. Using a small‐open‐economy New‐Keynesian model with disaster shocks, we show that consistent with textbook theory, inflation targeting remains the welfare‐optimal regime. Therefore, the best strategy for monetary authorities is to resist the impulse of accommodating in response to catastrophic natural disasters, and focus on price stability. [ABSTRACT FROM AUTHOR]

Copyright of Uluslararasi Ekonomi ve Yenilik Dergisi is the property of Karadeniz Technical University, Depertmant of Economics and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Objective: to identify trends in the development of the Russian economy during the new anti-Russian sanctions. To this end, the paper analyzes the impact of the new sanctions on the budgetary sphere, the development of economic sectors and industries and the Russian regions.Methods: the work uses data from the Federal State Statistics Service (Rosstat), the Federal Treasury, the Ministry of Economic Development of the Russian Federation (Ministry of Economic Development), the Central Bank of the Russian Federation (Bank of Russia), the Federal Tax Service (FTS), the Federal Customs Service (FCS), the Federal Antimonopoly Service (FAS). For their analysis, graphical, tabular, and analytical methods are used.Results: the new anti-Russian sanctions caused significant changes in the structure of the Russian exports and trade balance. The reduced inflow of foreign currency put significant pressure on the ruble exchange rate, which created inflation risks. The devaluation was restrained by the Bank of Russia new currency regime. The favorable situation in the energy market in 2022 led to an increase in budget revenues. In 2023, economic growth resulted from an active fiscal policy supported by moderate monetary expansion. However, it was achieved at the cost of an increase in the budget deficit and public debt. The response of different industries and regions to the sanctions shock was heterogeneous. The development of certain adaptive strategies by economic entities, as well as the response of the authorities played an important role. The new sanctions regime prompted a revision of the state economy regulation paradigm. Dirigisme manifested itself in the increase of state orders, subsidies and other support for protected industries with one-time withdrawals of opportunistic revenues of big business. Monetary and fiscal policy gradually acquired a hybrid character. Direct and indirect price regulation became an important instrument of state regulation during the sanctions.Scientific novelty: it consists in a comprehensive analysis of development trends during the new anti-Russian sanctions, their impact on foreign economic parameters, budgetary sphere, financial system, development of Russian industries and regions.Practical significance: statistical information on various aspects of the Russian economy development during the new antiRussian sanctions was summarized and analyzed. The work can be useful to researchers studying the functioning of the Russian economy under sanctions, as well as to businesspersons for assessing the risks, opportunities and prospects of their businesses development, and to government agencies for forming an effective anti-crisis policy.

Copyright of Journal of Economics & Administrative Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Ghana was the second African country to adopt the inflation-targeting framework in 2007. The country faced persistently high levels of inflation, exceeding 100 percent in the early 1980s. Since the adoption of the inflation targeting regime, the inflation rate has decreased and remains below 20 percent. Given the importance of the policy mix in achieving price stability and economic growth in any economy, this study examines which policy mix is more effective in determining the inflation dynamics in Ghana. Annual data from 1980 to 2021 and the autoregressive distributed lag (ARDL) were used, firstly on individual monetary and fiscal policy models and then jointly on the policy mix model. Results show that fiscal policy is effective and significant in determining inflation dynamics in Ghana in the long run, while monetary policy is ineffective, less dominant, and statistically insignificant. Monetary policy is effective and significant in the short run. Based on the findings of the study, policy recommendations include giving more attention to the possible coordination of fiscal and monetary policies than has been previously given. The study's originality is in examining if the monetary or fiscal policy (policy mix) effectively regulates the inflation rate in Ghana; the inflation target and the exchange rate as external shocks were included, amongst others and estimating the separate and combined models for the policy mix. [ABSTRACT FROM AUTHOR]

The present work aims to assess the existence of the relationship between financial inclusion and monetary stability in Mozambique based on the analysis of the VEC model for the period from 2005 to 2020. In addition to indicators of traditional banking institutions, this article goes further by also incorporating indicators relating to services of electronic money institutions with the objective of capturing the impact of digital financial services on financial inclusion and their role in financial stability. The long-term VEC model proved to be statistically significant and confirmed the existence of a long-term relationship between financial inclusion and monetary stability. The results also showed that the traditional financial inclusion and non-traditional digital financial inclusion drives the price stability, and in turn, monetary stability. The study concludes that the effectiveness of monetary policy in Mozambique depends on the predictive capacity of the monetary policy instruments, which are highly correlated, to financial inclusion. In this sense, the monetary authority must consider the need to incorporate financial inclusion variables, especially the non-traditional digital ones, in the transmission and forecasting model of the monetary policy rule, to capture the dynamics of financial inclusion segment and its contribution to price stability. [ABSTRACT FROM AUTHOR]

The role of central banks in perpetuating and tackling the economic patterns associated with climate change has increasingly been subject to academic and political attention. The Bank of England is no exception, having received a new mandate to 'facilitate the transition to net zero' in March 2021. This follows the Bank's utilisation of its monetary tools to repeatedly stabilise the economic status quo since 2008, despite its ecological consequences. This article reveals the perceptions within the British state of the new mandate and the forms of institutional change demanded by it, based on a series of elite interviews with Treasury officials and other UK monetary policy experts, as well as a discourse analysis of Bank publications and speeches. We find that Bank actors lobbied for the new mandate to legitimise its development of climate risk assessments and licence internal dialogue on the implications of its monetary policy. But the mandate is perceived to be in immediate conflict with, and subservient to, the Bank's primary structural objective of maintaining price and financial stability, due to the potentially destabilising effects of private capital realignment during a net zero transition. Institutional change within the Bank is thus limited to extending its pre-existing function of mitigating risks to financial stability rather than facilitating decarbonisation through market-shaping governance of the financial sector. [ABSTRACT FROM AUTHOR]

Copyright of Journal of Economics & Administrative Sciences is the property of Republic of Iraq Ministry of Higher Education & Scientific Research (MOHESR) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study complements the emerging literature on the COVID-19 pandemic and provides direction, in the case of Nigeria, for targeting monetary policy response to mitigate the pandemic's economic consequences. We simulate three scenarios: (i) do-nothing; (ii) reduce MPR gradually and (iii) reduce MPR drastically; amidst falling oil prices. The do-nothing scenario, although inflationary, would produce a marginal appreciation of the Naira/USD exchange rate. Gradual or drastic reduction of MPR would deliver relative price stability, but will undermine exchange rate stability and deplete external reserves. MPR should optimally not be reduced below 12% in response to the economic effect of the pandemic. [ABSTRACT FROM AUTHOR]

This article examines the relationship between inflation and Iraq's currency supply. In order to better inform monetary policy, this research investigates the connection between money supply and inflation. The article aims to provide policymakers with a better understanding of the factors contributing to inflation in Iraq. This research incorporates an econometric analysis of data acquired from the Central Bank of Iraq and other sources. The data covers a period from 2011 to 2022. Inflation and money supply are the focus of the time series regression model shown here. Inflation in Iraq may be linked to the country's money supply, the results suggest. Rapid and immediate responses to changes in the money supply are characteristic of inflation. The research shows additional factors in Iraq's inflation besides government policies and currency rates. The results of this study provide substantial knowledge of the origins of Iraq's inflation. According to the results, regulating the money supply is essential for controlling inflation. The analysis also shows how important it is to have a broader view of inflation and its causes. This information helps build effective methods to stabilise the economy and sustain price stability in Iraq. [ABSTRACT FROM AUTHOR]

This paper highlights the role of climate change as a persistent, systemic, long-term inflationary driver. The inflationary impacts of climate change have been commonly overlooked in the economic literature. As global temperatures rise and extreme weather events become more frequent and severe, the inflationary effects of climate change will only intensify. These effects could be further exacerbated by the considerable pricing power of the corporate sector. As a persistent inflationary driver, climate change poses a serious threat to central banks' ability to maintain price stability mandates. The traditional tools of monetary policy will be ineffective in curbing climate change-induced price pressures. Further, growth-based Green New Deal and related fiscal policies will be ineffective at mitigating climate change and reducing its inflationary impacts. Unless degrowth solutions are sought, climate change and its price effects will only intensify over time. [ABSTRACT FROM AUTHOR]

The Federal Reserve System (Fed) is a regular feature in the media. When the Fed communicates with the public, its focus is on forward guidance related to monetary policy--specifically, for achieving low unemployment and low inflation. Fed participants on the Federal Open Market Committee (FOMC) convey what they see as the likely path of policy, including changes in the federal funds rate, a standard monetary policy tool. Because financial markets find this information useful, news stories thoroughly cover Fed communication. However, such communication fails to explain the structure of the economy that disciplines how the FOMC achieves its objectives for employment and inflation. The FOMC necessarily conducts monetary policy based on assumptions about this structure. What is now implicit should be made explicit. Such explicitness by the FOMC is necessary for the public to understand the monetary standard that it has created. That is, the Fed needs to explain the framework it assumes to then explain how its actions translate into achievement of its objectives. Such transparency will be challenging. The standard Fed narrative implicitly assumes that a free-market economy and financial markets are inherently unstable. Economic instability originates in the private sector, and an independent Fed is required to mitigate this instability. Again, implicitly, the assumption is that the Fed understands the structure of the economy so that it knows the origin of instability and how its actions will offset that instability. Despite the Fed narrative, there is a need for a debate over the optimal monetary standard. In the 1960s, the monetarist-Keynesian debate raised the key issues relevant to the design of the optimal monetary standard. Is inflation a monetary or a nonmonetary phenomenon? What accounts for the simultaneous occurrence of monetary instability and real instability. Does the direction of causation go from monetary to real instability or vice versa? The intent of this article is to revive the earlier debate. To do so, it will be necessary to re-exposit monetarism in a way relevant to current central bank practice. To do so, I re-exposit monetarism in a way that is relevant to current central bank practice, using the term "Wicksellian monetarism" as the descriptive label. Such a debate is especially urgent at present given the FOMC's current policy of disinflation. The FOMC needs to articulate a monetary policy in terms of a long-term strategy (rule) that will restore price stability and then maintain that stability. How does current policy ensure that a declining rate of inflation will stop at 2 percent and then remain there? That is, for the long run, the policy needs to provide a stable nominal anchor. Such a policy should allow the FOMC to lower the federal funds rate to prevent a serious recession while maintaining credibility for a long-run policy to restore price stability. [ABSTRACT FROM AUTHOR]

The article analyses the communication of the National Bank of Poland (NBP) one year after the announcement of the crisis response package adopted after the outbreak of the COVID pandemic. It presents the perspective of a central bank that first entered unconventional monetary ground during the COVID-crisis. The analysis aims to answer the question of what message about monetary policy objectives may have been conveyed in communication with regard to possible interpretations of the response actions by economic agents. Misinterpretations of policy actions at the time, fuelled by the increased attention to inflation, could later contribute to higher inflation persistence. The article presents findings based on the innovative use of MAXQDA Pro 2022 solutions for textual analysis of central bank’s communication. It points to three inconsistencies in the NBP’s communication that could potentially lead to misinterpretation of the NBP’s policy actions in response to the crisis and thus affect the formation of expectations. [ABSTRACT FROM AUTHOR]

This paper considers a standard New Keynesian model with matching frictions and explores the impact of modeling the opportunity cost of employment as government unemployment transfers. The findings reveal that under such circumstances, maintaining full price stability at all times ceases to be optimal. This outcome persists even when production subsidies are introduced to address inefficiencies caused by imperfect competition in product and factor markets, and when wages are fully flexible and the Hosios condition holds. For a realistic calibration of the opportunity cost, the Ramsey-optimal policy necessitates a positive inflation rate with high volatility. The degree of inflation volatility required increases with the magnitude of unemployment transfers. Consequently, committing to an inflation targeting regime proves to be highly costly in this context. Additionally, the study demonstrates that the optimal inflation variability decreases with workers' bargaining power. This is because higher workers' bargaining power leads to reduced labor market fluctuations, thereby lowering the need for large inflation adjustments. [ABSTRACT FROM AUTHOR]

This research study looks at the causes and consequences of inflation in Yemen, with a particular emphasis on the economic variables that contribute to inflationary pressures and the efficacy of strategic efforts in limiting their influence. The research takes a comprehensive approach, including both qualitative and quantitative approaches. A thorough examination of the current literature on inflation in Yemen is carried out in order to identify important economic variables driving inflation trends. In addition, case studies of strategic initiatives conducted by policymakers and international organizations are reviewed to assess their effectiveness in reducing inflation. The study's findings highlight numerous crucial economic elements that are fuelling Yemen's inflation. Notably, price controls, targeted subsidies, and other strategic interventions, such as monetary policy adjustments, have been shown to be beneficial in decreasing inflationary pressures. Furthermore, the study emphasizes the importance of political stability, foreign help, and structural reforms in strengthening Yemen's economy and its capacity to sustain stable pricing over time. Furthermore, examining strategic interventions improves comprehension of their efficiency in combatting inflation, while a full assessment of economic variables gives light on the underlying causes of inflation in Yemen. [ABSTRACT FROM AUTHOR]

Copyright of Economica: Revistă Ştiinţifico-Didactică is the property of Academy of Economic Studies of Moldova (AESM) / Academia de Studii Economice din Moldova (AESM) and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Continuous increase in the general level of prices or excessive volatility are among the most important problems of the economy. If the price stability is considered as the main objective in monetary policy, first of all, the factors causing instability in the general level of prices should be identified and then appropriate monetary policy tools should be used. The main objective of the Central Bank of North Macedonia, set by law, is to ensure the price stability. To achieve the final target, the Central Bank sets the intermediate target of monetary policy. The Central Bank since January 2002 has been implementing a fixed exchange rate strategy against the Euro. Therefore, ensuring the stability of the exchange rate is one of the intermediate objectives of monetary policy. While the effects of the COVID 19 pandemic were overcome in 2021, the global food crisis that broke out in 2022 affected the whole world, while the North Macedonian Economy experienced high price increases that have not been seen for many years. As a matter of fact, the country reached double-digit inflation in 2022. Inflationary pressures in the economy are mainly caused by the prices of products in which food and energy have a high share in the consumption basket. Due to the increase in prices, the Central Bank of North Macedonia has gradually narrowed its monetary policy since 2022. As a contractionary monetary policy instrument, additional measures were taken in compulsory reserves, particularly in interest rates. In order to ensure the price stability, the monetary policies implemented should be supported by fiscal policies. The government's taking parallel steps with the central bank in this regard will reduce the pressure on prices. [ABSTRACT FROM AUTHOR]

Copyright of Perspektiven der Wirtschaftspolitik is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Perspektiven der Wirtschaftspolitik is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

The relationship between inflation and real GDP growth is one of the most widely researched topics in macroeconomics. At the same time, it is certainly not an exaggeration to claim that this nexus also stands at the heart of monetary policy, given the fact that low inflation in combination with high and sustained output growth should be the central objective of any sound economic policy. The latter notion becomes even more obvious when taking account of the fact that many central banks all over the world have selected target levels for inflation and communicated them to the public. Against this background, it is of utmost importance for central banks to understand more about the nature and formation of the relationship between inflation and real GDP. This study attempts to shed more light on the specific shape of this relationship for the euro area and, more specifically, on the issue of possible regime shifts therein. The analysis provides strong evidence for non-linear effects in the euro area. As a by-product, and seemingly the novel contribution, of this paper, the methods used allow for the quantification of a switching point across the different regimes. It is found that this breakpoint closely matches the ECB's previous definitions of price stability and its new inflation target of 2%. While these results look encouraging, further research in this area seems to be warranted. [ABSTRACT FROM AUTHOR]

Monetary policy has had perhaps the most controversial definition and evolution over time, starting from maintaining the target of the gold standard, to creating a regulated set of measures and strategies by which the competent monetary authorities fulfill their main objective of keeping price stability. Considering the magnitude of the inflationary phenomenon in recent years, the Central Bank acted promptly and made several changes to monetary policy decisions. This research employs econometric analysis to address the query: "To what extent does the consumer price index impact monetary policy decisions?". To answer this question and to identify the positive and negative effects brought by the sudden change of monetary policy decisions a binomial econometric model was created with five variables, namely, a dependent variable, represented by the consumer price index, and four independent variables, respectively the monetary policy interest rate, the lending facility interest rate (lombard), the interest rate on the deposit facility and the exchange rate (EUR/RON). The research methodology is comprehensive, encompassing empirical qualitative and comparative analysis to scrutinize the inflationary phenomenon. Simultaneously, it utilizes econometric modelling to quantify pertinent indicators, which leads this paper, from the perspective of the nature of the research, towards a quantitative, test research. The results obtained highlight a significant and direct relationship between interest rates, the exchange rate and inflation. [ABSTRACT FROM AUTHOR]

Copyright of Investigación Económica is the property of Universidad Nacional Autonoma de Mexico, Facultad de Economia and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article analyses the balanced‐growth‐path effects of monetary policy (inflation) on the skill premium and the growth rate in the context of a directed technical change model with cash‐in‐advance (CIA) constraints specific to the unskilled and skilled sectors. Calibrating the model using data from 36 countries, the presence of more stringent CIA constraints in the unskilled sector, as supported by the literature, causes inflation to have a positive effect on the skill premium. Moreover, it also increases the negative impact of inflation on the growth rate in relation to the baseline scenario of homogeneous CIA constraints. A lower labour share and higher inflation in general magnify these effects on both variables while a relative lower importance of the unskilled sector does the opposite with respect to the skill premium. Therefore this article innovates in three important ways: (i) we add an additional channel through which inflation affects inequality; (ii) we highlight the importance of avoiding ignoring differences of liquidity constraints across the economy in the context of endogenous growth models to not underestimate the negative long‐run impacts of inflation; (iii) the results suggest that developing countries that have difficulty in achieving price stability in the long‐run can mitigate the negative effects of inflation by reducing constraints faced by the unskilled sector and promoting the development of the skilled sector. [ABSTRACT FROM AUTHOR]

The European Green Deal and the European Climate Law highlight the EU's commitment to strive for carbon neutrality. Considering the magnitude of the global challenge, it is evident that a green transition will not succeed without the efforts of every sector, including financial institutions. Concerns have been raised that central banks may, in fact, contribute to the increase of greenhouse gas emissions and, in consequence, aggravate global warming. This all has currently resulted in a rapid expansion of the debate on the potential role of central banks, and in particular the ECB, to consider climate objectives. In the European context, however, it is often argued that environmental sustainability lies outside the ECB's traditional core mandate to focus on price stability. This article aims to introduce the environmental integration principle, laid down in Article 11 TFEU, in the ECB's legal framework, and provide an analysis of the possibilities for and limitations to the greening of the ECB's monetary policy based on this provision. Although Article 11 TFEU has great potential with regards to the greening of sectoral policies, in legal literature, the provision has not gained enough academic attention in terms of the financial sector. [ABSTRACT FROM AUTHOR]

Each market economy uses monetary policy to attain certain macroeconomic goals of price stability, higher growth and employment. A market economy having an interest-based conventional banking system applies mainly interest-based tools to attain the objectives of monetary policy. In contrast, a market economy with interest-based and interest-free banking needs to apply Shariah-compliant monetary instruments vis-à-vis conventional tools for attaining the goals of the monetary policy. As there is a paucity of quality research on Sukuk-based monetary policy, the current paper will explore Shariah compliant monetary instrument 'Sukuk' for use as a monetary tool in dual banking, examining experiences of Shariah-based monetary operations in different countries. The paper will also examine the challenges of monetary policy operating in the dual banking system of Bangladesh with policy options for addressing the challenges. [ABSTRACT FROM AUTHOR]

After the two recent global shocks of the COVID-19 Pandemic of 2019–2021 and the Russian invasion of Ukraine in February 2022, the 2023–24 economic priority for the Euro Area is the fight against inflation in the midst of global economic and financial uncertainties. We focus on Euro Area inflation, analyze its diagnostics, examine inflation expectations, review theories of inflation and evaluate monetary and fiscal policies prompted because of COVID-19. Then we explore policies of the European Central Bank to fight inflation and conclude that restoration of price stability in the Euro Area will remain its central focus during 2023 and 2024. [ABSTRACT FROM AUTHOR]

We study optimal monetary policy in an analytically tractable heterogeneous agent New Keynesian model with rich cross-sectional heterogeneity. Optimal policy differs from a representative agent benchmark because monetary policy can affect consumption inequality, by stabilizing consumption risk arising from both idiosyncratic shocks and unequal exposures to aggregate shocks. The trade-off between consumption inequality, productive efficiency, and price stability is summarized in a simple linear-quadratic problem yielding interpretable target criteria. Stabilizing consumption inequality requires putting some weight on stabilizing the level of output, and correspondingly reducing the weights on the output gap and price level relative to the representative agent benchmark. (JEL E12, E23, E31, E32, E52, E62) [ABSTRACT FROM AUTHOR]

Worldwide, inflation is one of the most used terms when discussing the economy and beyond. Inflation is the indicator that governments, the population, financial entities, investors and not least monetary authorities are interested in. Since central banks have price stability as their main objective or not, they act through monetary policies when necessary. Monetary decisions in the Eurozone and the United States - as financially important regions - influence other economies. This paper focuses on the study of the evolution of the inflation rate in these two cases because of the importance of the subject. It will be found that inflation can also be a challenge for these large financial entities -- Federal Reserve System and European Central Bank. [ABSTRACT FROM AUTHOR]

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The ECB's Transmission Protection Instrument (TPI) supports the effective transmission of the monetary policy stance throughout the euro area, which is a precondition for the ECB to deliver on its price stability mandate. If activated, the Eurosystem would purchase securities issued in jurisdictions that experience a deterioration in financing conditions not warranted by country-specific fundamentals. The TPI thereby complements other tools to counter risks to the transmission mechanism such as the Pandemic Emergency Purchase Programme (PEPP) reinvestment flexibility and the Outright Monetary Transactions (OMT) programme. [ABSTRACT FROM AUTHOR]

While optimal monetary policy is theoretically recognized to provide food price stability, the empirical evidence about this effect is limited, especially in the countries of the European Union and within this in Central and Eastern Europe. This paper investigates the role of monetary policy shocks on food inflation in Hungary over the period January 2007 to November 2022. Hungary is a good case study because of its higher than average share of food in the consumer basket in the EU. Using a quantile regression analysis, we find that neither monetary policy nor the exchange rate has an effect on food inflation across quantiles. However, inflation plays a significant role in driving food price increases. The global food price index increases food price inflation in the lower quantile. The results are robust to different specifications and measures of variables. [ABSTRACT FROM AUTHOR]

We study the potential role of the ECB in supporting the transition to a low-carbon economy by decarbonizing the corporate sector purchase programme (CSPP). We demonstrate that the carbon intensity of CSPP purchases is determined by three main factors: First, by the CSPP-eligibility criteria, as these tend to exclude bonds from low-emission sectors. Second, by the underlying structure of the bond market, as this tends to be skewed towards carbon-intensive sectors. Third, among the eligible bonds, the ECB tends to select those from relatively emission-intensive sectors. To decarbonize the CSPP, the ECB can theoretically act along these three lines: (i) adjust the CSPP-eligibility criteria to expand the range of eligible low-carbon assets, (ii), revise the principle of market neutrality to tilt the CSPP portfolio towards low-carbon companies, or, (iii), purchase so far neglected low-carbon bonds within the current eligibility and market neutrality framework. As all approaches have either very limited effects or are associated with significant theoretical and practical concerns, we conclude that their contribution to the success of active green monetary policy is not guaranteed, while at the same time risks arise for a monetary policy that targets price stability. [ABSTRACT FROM AUTHOR]

Copyright of Itobiad: Journal of the Human & Social Science Researches / İnsan ve Toplum Bilimleri Araştırmaları Dergisi is the property of Itobiad: Journal of the Human & Social Science Researches and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

China has experienced rapid economic growth in recent decades. The benefits of economic growth are indisputable. However, risks are also generated that can jeopardize the sustainability of economic progress. Real estate bubbles, for example. The rapidly soaring house prices are one of the severe challenges in China in recent years. The real estate tax, monetary policy, and macro-prudential policy are the three main measures of the Chinese government to stabilize house prices. This paper studies the topic of which policy or policy portfolio can be an effective long-run mechanism of house price regulation by incorporating the real estate sector into the Dynamic stochastic general equilibrium (DSGE) model. Three important conclusions are drawn from the numerical simulation analysis based on the data of China. First, employing any policy portfolio can mitigate the fluctuation of house prices more effectively and decrease the loss of social welfare relatively compared to implementing a single policy. Second, the long-run regulating effect of the policy portfolio of monetary policy and macro-prudential policy can suppress the fluctuation of house prices in China while minimizing social welfare loss. Third, whether the real estate tax is combined with monetary policy or macro-prudential policy, the long-run regulating effect is insignificant. The real estate tax cannot be used to regulate house prices in China. [ABSTRACT FROM AUTHOR]

Previous work on the politics of monetary policy has focused on the role of distributive motives stemming from individual characteristics such as income or factoral/sectoral interests in citizens' formation of monetary policy preferences. However, the existing literature has paid little attention to how a country's overall distributive context, namely, its level of economic inequality, affects citizens' preferences vis‐à‐vis price stability and employment. This article argues that as inequality pushes more citizens below a society's average income, there is more demand for redistribution through higher employment and increased fiscal spending, each of which can be better supported by expansionary monetary policy. This means that inequality makes citizens more tolerant of inflation. This study uses the International Social Survey Program, the Integrated Values Surveys, and the Comparative Study of Electoral Systems, which together include 293,100 respondents from 53 countries between the years 1976 and 2016 to demonstrate that overall, inequality significantly moderates citizens' inflation aversion. [ABSTRACT FROM AUTHOR]

Does monetary policy react systematically to macroeconomic innovations in emerging and low-income countries? And do such systematic responses vary across monetary policy regimes? In a sample of 16 countries – operating under various monetary regimes – we find that monetary policy decisions, as expressed in yield curve movements, do react to macroeconomic innovations in almost all countries. The speed and strength of reactions are not identical across all countries, however, but reflect the monetary policy regime. While we find evidence of the primacy of the price stability objective in inflation-targeting countries, the links to inflation and the output gap are generally weaker and less systematic in money-targeting and multiple-objective countries. [ABSTRACT FROM AUTHOR]