Wait a second!
More handpicked essays just for you.
More handpicked essays just for you.
the impact of Monetary and fiscal policy
the impact of Monetary and fiscal policy
the impact of Monetary and fiscal policy
Don’t take our word for it - see why 10 million students trust us with their essay needs.
Recommended: the impact of Monetary and fiscal policy
2.1.2.1 Greece’s Monetary Policy Strategy
The Eurosystem conducts monetary policy in the euro area, their principal aim is making certain that prices remain stable. Monetary policy sets the fundamental ECB interest rates. This activity is carried out by the Governing Council of the European Central Bank (ECB). Monetary policy decisions are made with the principal aim in mind, which is then publicised by the President of the ECB (Bank of Greece, 2014; F.Saccomanni, 2013; Vlamis, 2014).
This Monetary Policy strategy includes, defining price stability quantitatively and aims at keeping the inflation rates just below 2% over the medium term. The two analytical approaches adopted is to analyse the present economic and fiscal improvements and the short to medium-term inflation effects. A fiscal and monetary investigation is conducted to analyse and assess conditions of general liquidity. All this considering inflation developments come from analysing the economies of all domestic and non-domestic counterparts (Bank of Greece, 2014; F.Saccomanni, 2013; Vlamis, 2014).
The Bank of Greece, being essential to the Eurosystem plays a part in formulating the Eurosystem’s monetary policy. The Governor of the Bank of Greece is also a member of the ECB Governing Council. The ECB Governing Council decide monetary policy.
The Bank of Greece are also involved in implementing the Eurosystem’s monetary policy. The bank also arranges for liquidity to, and acknowledges deposits from, credit organisations in the Eurosystem’s fiscal approach (Bank of Greece, 2014; F.Saccomanni, 2013; Vlamis, 2014).
The Bank of Greece is responsible in informing the Greek public on monetary policy.
Euro credit institutions are allowed to accept national bank credit th...
... middle of paper ...
...orld Bank (2014) The World Bank. [Online] Available at: http://www.worldbank.org/ [Accessed 5 March 2014].
The World Bank (2014) The World Bank Glossary. [Online] Available at: http://www.worldbank.org/depweb/beyond/global/glossary.html#34
[Accessed 6 March 2014].
UNDP (2007) The United Nations Development Programme (UNDP) in its Human Development Report., The United Nations.
University of London (2014) The Centre for Financial and Management Studies - Conceptualising Development. [Online] Available at: http://www.cefims.ac.uk/cedepapp/116_web_unit/page_08.htm
[Accessed 10 March 2014].
University of Yale (2006) Economics 115b. [Online] Available at: http://www.econ.yale.edu/~gjh9/econ115b/index.html [Accessed 10 March 2014].
Vlamis, P., 2014. Greek fiscal crisis and repercussions for the property market. Journal of Property Investment and Finance, 32(1), pp. 21-34.
Indicators. United Nations, 7 July 2011. Web. 16 Nov. 2011. This data sheet shows the
Monetary Policy is another policy used in Keynesianism which is a list of protocols designed to regulate the economy by setting the amount of money that is in circulation and controlled interest levels. The Federal Reserve system, also known as the central banking system in the U.S., which holds control of this policy. Monetary policy has three tools used by the Federal Reserve to enforce this policy. Reserve Requirement is the first tool that determines the lowest amount of money a bank must possess and is not able to lend out. The second way to enforce monetary policy is by using the discount rate or the interest rate a bank will charge.
The Island of Mocha in the video is an example of a traditional economic system evolving into a market system. Every person plays a key role in this traditional system. They had fisherman, coconut collector, melon seller, lumberman, barber, doctor, preacher, brownies seller, and a chief. The Mochans got sick of trading goods all across the island just to get the things that they want or needed. The Chief decided that they would use clam shell for currency instead of trading.
The above diagram shows the inflation rate of Euroarea. During recession, the inflation rate of Euroarea did not fell a lot. This shows that ECB policy was successful to kept the inflation rate around the normal rate that is 2%.
Wildlife tourism has become a particularly popular trend over the years. Riding on elephants, taking pictures with lions, swimming with dolphins are only a few of the adventurous and thrilling activities that wildlife tourism provides. Even my own school is planning a trip to South Africa to participate in several of the enthralling ventures.
Conducting the nation's monetary policy by influencing money and credit conditions in the economy in pursuit of full employment and stable prices.
To most people in the United States hearing the word Euro brings about blank stares. Ask this same question in England or another European country and it means bringing Europe together under one common currency. The Euro can be defined as the common monetary system by which the participating members of the European Community will trade. Eleven countries Germany, France, Spain, Portugal, Ireland, Austria, the Netherlands, Belgium, Luxembourg, Finland and Italy will comprise the European Economic Monetary Union that will set a side their national currency and adopt the Euro in 2002. A new National bank, based in Frankfurt Germany, will be constructed and the interest rates that control the economies of these nations will be in the hands of this new system. It is indeed a great experiment, being masterminded in Frankfurt, one that will be felt through out Europe as well as the rest of the world.1
In the study of macroeconomics there are several sub factors that affect the economy either favorably or adversely. One dynamic of macroeconomics is monetary policy. Monetary policy consists of deliberate changes in the money supply to influence interest rates and thus the level of spending in the economy. “The goal of a monetary policy is to achieve and maintain price level stability, full employment and economic growth.” (McConnell & Brue, 2004).
The term Monetary policy refers to the method through which a country’s monetary authority, such as the Federal Reserve or the Bank of England control money supply for the aim of promoting economic stability and growth and is primarily achieved by the targeting of various interest rates. Monetary policy may be either contractionary or expansionary whereby a contractionary policy reduces the money supply, reduces the rate at which money is supplied or sets about an increase in interest rates. Expansionary policies on the other hand increase the supply of money or lower the interest rates. Interest rates may also be referred to as tight if their aim is to reduce inflation; neutral, if their aim is neither inflation reduction nor growth stimulation; or, accommodative, if aimed at stimulating growth. Monetary policies have a great impact on the economic stability of a country and if not well formulated, may lead to economic calamities (Reinhart & Rogoff, 2013). The current monetary policy of the United States Federal Reserve while being accommodative and expansionary so as to stimulate growth after the 2008 recession, will lead to an economic pitfall if maintained in its current state. This paper will examine this current policy, its strengths and weaknesses as well as recommendations that will ensure economic stability.
Michelis, L. (2011). The Greek Debt Crisis: Suggested Solutions and Reforms. The Rimini Centre Economic Analysis (RECEA), Italy.
The Greek economy has seen a large collapse following the recent worldwide recession. The European Union has expressed concerns for the impact that Greece’s economic collapse will negatively affect other member nations. Greece and the European Union are working to reduce the Greek deficit and to contain the economic crisis to Greece.
Entering the 21st. Century – World Development Report 1999/2000. World Bank 2000. Oxford University Press. New York, NY 2000.
United Nations Development Programme (UNDP), Human Development Report (2000) Human Rights and Human Development (New York) p.19 [online] Available from: [Accessed 2 March 2011]
United Nations, (2013) the millennium development goals report 2013 [ONLINE] United Nations. Available at: http://www.un.org/en/development/desa/publications/mdgs-report-2013.html [Accessed on 26 December 2013]
Paul, B & Miller, W 1985, ‘The conceptual framework: myths and realities’, Journal of Accountancy, vol. 159, issue. 3, p. 62, ProQuest Central Database, viewed 30 April 2014