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Implications of Globalization for Monetary Policy

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  • Helmut Wagner
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    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.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 01/184.

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    Length: 62
    Date of creation: 01 Nov 2001
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    Handle: RePEc:imf:imfwpa:01/184

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    Keywords: Monetary policy; inflation; central bank; price stability; inflation targeting; rate of inflation; monetary economics; inflation rate; monetary transmission; monetary transmission mechanism; optimal low inflation; aggregate demand; discretionary high inflation; costs of inflation; price level; monetary fund; real interest rate; economic instability; terms of trade; money supply; monetary authority; monetary authorities; monetary policy rules; monetary aggregates; inflation-targeting; financial stability; monetary policy rule; monetary policies; inflation target; nominal interest rates; real output; macroeconomic performance; monetary policy transmission mechanism; macroeconomic stability; monetary union; monetary institutions; rational expectations; monetary aggregate; price inflation; rising inflation; reserve requirements; national forecasting inflation; moderate inflation; monetary instruments; low rate of inflation; monetary expansion; monetary targeting; monetary policy strategies; european monetary union; foreign exchange; transmission of economic growth without inflation; printing money; restrictive monetary policies; independent central bank; nominal variables; intermediate monetary target; money demand; independent stable prices; inflation tax; monetary control; money growth; high inflation rate; inflation rates; inflation aversion; inflation performance; open market operations; money market; monetary target;

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    Cited by:
    1. Helmut Wagner & Wolfram Berger, 2004. "Globalization, Financial Volatility and Monetary Policy," Empirica, Springer, vol. 31(2), pages 163-184, June.

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