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Modern Features of the Monetary Policy of the Leading World Countries


  • Elena Yuryevna Sokolova

    () (Center for Monetary Policy and Financial Markets, Financial University under the Government of the Russian Federation)


The global crisis of 2007–2009 exposed the problems of the financial system, arising from the rapid development of derivative financial instruments and the increase in transnational capital flows. Moreover, in countries with developed markets, whose economy was considered stable, the consequences were the most severe. The shortcomings of monetary policy pursued by the monetary authorities of most countries were revealed. The Central banks are transforming from institutions that support price stability and ensure the sustainability of the financial market into the main tool stimulating economic growth. In order to restore the economy after the global financial crisis of 2007–2009, the Central banks of the world’s leading countries began to move away from standard methods and tools of monetary policy. Fiscal policy mechanisms have been applied to support the economy in developing countries, while monetary policy instruments have been used in developed countries. The leading countries of the world have moved to the use of non-standard methods of monetary regulation of the economy. Monetary authorities began to designate the unemployment rate as a benchmark of monetary policy, as well as to pay attention to the management of expectations of market participants, using the policy of ‘forward guidance’, which allows to get information about the upcoming changes in the monetary policy and interest rates. It was necessary to rethink the goals and objectives of the regulators, not to be limited to ensuring the price stability. The USA, Japan, England and other countries are moving from interest rate policy to non-standard methods of monetary policy and, in particular, to the method of ‘quantitative easing’. These operations contributed to the reduction of rates on public and private securities, stimulated changes in the structure of investment portfolios and improved the conditions of bank lending. At the same time, the success of the world’s leading countries in using quantitative easing programmes, for example, to stabilize prices, is not so evident. Their regulation is connected with factors that are not controlled by the Central banks, as is often said by the heads of the Central Bank. The Central Banks’ executives and other representatives of the financial community in general positively assess the role and effectiveness of ‘untraditional’ monetary policy and when considering the termination of quantitative easing operations and the transition to pre-crisis standards of interest rate policy, the heads of the most Central banks do not want to rush. The article discusses the reasons for changes in monetary policy, the characteristics of the quantitative easing operations by countries, the problem of basic quantitative easing measures usage as an effective means of preventing and overcoming economic crises

Suggested Citation

  • Elena Yuryevna Sokolova, 2019. "Modern Features of the Monetary Policy of the Leading World Countries," Spatial Economics=Prostranstvennaya Ekonomika, Economic Research Institute, Far Eastern Branch, Russian Academy of Sciences (Khabarovsk, Russia), issue 3, pages 147-164.
  • Handle: RePEc:far:spaeco:y:2019:i:3:p:147-164
    DOI: 10.14530/se.2019.3.147-164

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    References listed on IDEAS

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    More about this item


    monetary policy; central bank; economic crises; ‘quantitative easing’ method; interest rate; banking credit; inflation;
    All these keywords.

    JEL classification:

    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy


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