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The Effectiveness Of Tight Monetary Policies In Reducing Overall Inflation

Author

Listed:
  • Marinela BÃRBULESCU

    (National University of Science and Technology POLITEHNICA Bucharest, Pite?ti University Centre)

  • Raquel Mercedes Garcia Revilla

    (UDIMA Madrid Open University, Faculty of Economics and Business Sciences, Spain)

  • Bogdan Budicã

    (University of Craiova, Faculty of Economics and Business Administration,)

Abstract

The rise in global inflation during the post-pandemic period has led to a significant shift in monetary policy orientation, marked by a rapid transition from accommodative measures to restrictive policies. This article analyzes the effectiveness of these policies in reducing inflation, using a qualitative and comparative approach based on secondary data. The analysis focuses on the major developed economies and the strategies adopted by the Federal Reserve, the European Central Bank, and the Bank of England. The results highlight a significant correlation between the tightening of monetary conditions and the reduction of inflation during the 2022–2024 period, but also underscore the limitations of these policies in the face of supply shocks. The study shows that the effectiveness of restrictive monetary policies depends on the nature of inflation and the structural characteristics of the economies. The findings suggest that monetary policy remains an essential tool, but is insufficient in the absence of complementary policies.

Suggested Citation

  • Marinela BÃRBULESCU & Raquel Mercedes Garcia Revilla & Bogdan Budicã, 2025. "The Effectiveness Of Tight Monetary Policies In Reducing Overall Inflation," Scientific Bulletin - Economic Sciences, University of Pitesti, vol. 24(2), pages 41-48.
    • Handle: RePEc:pts:journl:y:2025:i::p1:41-48
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    Keywords

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    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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