What Monetary Policy Can Do: The Clarified Approach of the Ecb

Abstract

In the confirmed and clarified monetary strategy of the ECB, money still plays a prominent role. Regarding inflation as a monetary phenomenon and concentrating on price stability the ECB rejects an activist monetary policy. However, public and open discussion may contribute to further improvement of transparency and predictability of the ECB's operations.

Fiscal Policy Consistency and Its Implications for Macroeconomic Aggregates: The Case of Uganda

“…The identification of the real sector (prices and GDP) is obtained by assuming that monetary sector variables affect the real sector with a lag. This reasoning is consistent with some studies (see, for instance, Christensen, , and Schonwitz, ) that show a weak contemporaneous relationship between real variables and money. Following Moosa (1997), we assume that real sector variables have no effect in identification of shocks in the monetary sector.…”

“…On the other side of the debate is the argument that the relationship between money supply and inflation may, under certain circumstances, become relatively weaker (Christensen, ; Schonwitz, ). This may be the case during periods of recovery such that modest increases in money supply instead works to ease supply side constraints, in which case it may not necessarily have a proportionate bearing on prices.…”