MONETARY POLICY AND THE INFLATION TARGETING STRATEGY

Zina V.MARCU căs. Cioran
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Zina V.MARCU căs. Cioran: Doctoral School of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Romania

SEA - Practical Application of Science, 2013, issue 2, 167-173

Abstract: The monetary policy is a basic component of the economic policy. It has an important role in fulfilling the main objectives of the economic politics, which is: price stability, insurance of a balanced economic raise, full occupancy of human resources and the external payment balance stability insurance. Inflation is a negative thing affecting the economy both on short and long term. On short term, it erodes the purchasing power of currency and thus, it mostly affects the retirees and those with fixed incomes. On long term, inflation discourages the investments and the economic growth. The purpose of this paper consists in the revision and presentation of the specialized literature concerning the impact the monetary policy has on the main macro-economical variables, especially on inflation, in terms of influence of the monetary authority decision on economic and financial conjunction. It was found that the monetary authorities of any country can evaluate exactly the rhythm and the effects of their actions on the economy by understanding the mechanisms which the monetary policy uses to influence the economy.

Keywords: Inflation targeting; Monetary policy; Price stability; Central bank independence (search for similar items in EconPapers)
JEL-codes: E31 E52 E58 G01 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:cmj:seapas:y:2013:i:2:cioran

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