Monetary Policy and Monetary Programming in Bangladesh

Mohammad Taslim

Bangladesh Development Studies, 2001, vol. 27, issue 4, 81-100

Abstract: The main instruments of economic policy of the government are fiscal policy and monetary policy.1 Fiscal policy relates to measures that affect the pattern and quantum of government spending and revenue while monetary policy entails discretionary changes in monetary aggregates and their opportunity costs. While the government directly determines fiscal policy in all countries, it exercises minimal control over monetary policy in some of the developed countries. The task of conducting monetary policy is entrusted to the central bank that is largely autonomous or even independent. The delinking of monetary policy from direct government control perhaps reflects an increased awareness of the considerable harm that can be wrought on the economy by an injudicious manipulation of monetary policy to gain short term political or electoral advantages by an unprincipled or beleaguered government. In most developing countries, including Bangladesh, the central bank does not enjoy much autonomy and monetary policy is largely determined by the government to complement its other policies or objectives.

Keywords: Monetary policy Central banks; Interest rates; Money demand; Monetary theory; Money supply; Classical economics; Income elasticity of demand (search for similar items in EconPapers)
JEL-codes: A10 (search for similar items in EconPapers)
Date: 2001
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Persistent link: https://EconPapers.repec.org/RePEc:ris:badest:0425

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