Monetary policy, market concentration and financial instability

Ilhan Dögüs

Chapter 11 in Central Banking, Monetary Policy and Financial In/Stability, 2025, pp 204-222 from Edward Elgar Publishing

Abstract: The post-Keynesian literature has rightly criticised inflation targeting as ineffective in achieving price stability since inflation is not a demand issue. It is legitimate, then, to question why inflation targeting has been implemented for the last three decades. This chapter argues that the main function of inflation targeting is to contribute to financialisation and market concentration, which are the distinguishing macro issues of the last three decades. Sharp rate hikes give rise to market concentration by stimulating bankruptcies, whereas rate cuts encourage M&A and takeovers by inflating financial markets. Interest rate changes pave the way for financial profits over financial speculation.

Keywords: Monetary policy; Market concentration; Economic policy; Financial stability (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035302147
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781035302154.00018 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:21992_12

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Darrel McCalla ().