Financial Innovations and Their Implications for Monetary Policy

?argu Alina Camelia () and Angela Roman
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?argu Alina Camelia: „Alexandru Ioan Cuza” University of Iasi, Faculty of Economics and Business Administration
Authors registered in the RePEc Author Service: Alina Camelia SARGU

Ovidius University Annals, Economic Sciences Series, 2011, vol. XI, issue 2, 1220-1225

Abstract: Over the past few decades, many financial innovations have ensured a more efficient allocation of resources, being thus considered an engine of economic growth, but at the same time, their rapid development complicated the environment in which central bank implements its policies. In this context, the aim of our research is to analyse the impact of financial innovation on the monetary transmission mechanism, highlighting how financial innovation affects these mechanisms both by altering the channels through which monetary policy operates and by changing the overall impact of monetary policy decisions. The results of our paper underline the fact that an appropriate knowledge of the mechanisms through which monetary policy affects the economy, especially in times of stress, is of crucial importance in order for the central bank to stabilise the economy and promote long-term economic growth. Hospitality industry development quidelines that concern the implementation of clean technologies, diversification of services and customer loyalty are influenced by the same global economic condition. Therefore, development and expansion plans of large global hotel groups are taken, mostly on short and medium time horizon.

Keywords: financial innovation; monetary policy; central-bank policies; financial markets (search for similar items in EconPapers)
JEL-codes: E51 E52 E58 (search for similar items in EconPapers)
Date: 2011
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