Unused methods of shaping the monetary base (Niewykorzystane metody ksztaltowania bazy monetarnej)

Jan Czekaj ()
Additional contact information
Jan Czekaj: Katedra Rynkow Finansowych Uniwersytetu Ekonomicznego w Krakowie

Research Reports, 2018, vol. 1, issue 26, 68-75

Abstract: Monetary policy in Poland is based on the concept of direct inflation target. According to commonly held opinion, the effectiveness of such policy depends on the credibility of the authorities that conduct monetary policy, which in turn depends on the independence of those bodies (central bank) from political authorities, which tend to destabilize the public finance sector, which was considered the primary cause of inflation. One of the most important institutional solutions is the prohibition of financing budget deficits by issuing central bank money. In the extreme version, the policy of direct inflation target makes it difficult or even impossible to implement a coherent state financial policy. The monetary policy pursued in Poland causes growing, on the one hand, foreign exchange reserves of the state, and on the other – an increase in foreign debt. The simultaneous reduction of foreign currency reserves and foreign debt would save at least PLN 8 billion annually. A reduction in foreign exchange reserves would not cause a significant increase in the risk of a currency crisis, as it would not change the net international investment position of Poland.

Keywords: money; monetary policy; money issue; central bank; foreign exchange reserves; financial policy of the state; public debt (search for similar items in EconPapers)
JEL-codes: E42 E47 E52 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sim.wz.uw.edu.pl/sites/default/files/artykuly/jan_czekaj.pdf (application/pdf)

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:sgm:resrep:v:1:i:26:y:2018:p:68-75

Access Statistics for this article

More articles in Research Reports from University of Warsaw, Faculty of Management Contact information at EDIRC.
Bibliographic data for series maintained by ().