Price Stability has been a primary target for monetary policies because of the issue of inflation emerging as a serious problem in 1970s. Although monetary policy applications have different features accross the countries according to their social and economic conditions and the positions of their central banks, price stability has kept this critical importance as being the ultimate goal. In the second half of the 1970s many countries has left the interest rate and exchange rate targeting, instead they have led to monetary aggregates. That monetary targeting being succesfull depends on long termed stable relation the targeted monetary aggregates and inflation. In short, money demand is supposed to be stable. After 1990s, inflation targeting has been new strategy, since monetary targeting and exchange rate targeting methods couldn’t manage to eliminate inflation. Inflation targeting has been very frıitful in terms of price stability in some countries. This study assessments role of a nominal anchor and transition process to inflation targeting of Turkey
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