Implications of Globalization for Monetary Policy

Helmut Wagner

No 2001/184, IMF Working Papers from International Monetary Fund

Abstract: This paper argues that the implications of globalization for monetary policy come mainly through two channels: On the one hand, the many structural changes that are associated with the globalization process cause an increase in the uncertainty surrounding monetary policy. This includes an increase in uncertainty about how to interpret macroeconomic data/indicators and about the monetary transmission mechanism. On the other hand, by strengthening the process of global economic integration, globalization increases international competition, thereby forcing market players to make structural adjustments or reforms that change the conditions or constraints under which monetary policy is implemented.

Keywords: WP; transmission mechanism; rate of inflation; exchange rate; Globalization; monetary policy; loss function; globalization process; price level; target regime; open economy; Inflation; Asset prices; Central bank autonomy; Output gap; Global (search for similar items in EconPapers)
Pages: 62
Date: 2001-11-01
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Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2001/184

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