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Deregulation and the Conduct of Monetary Policy

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  • M. Monadjemi
  • C. Kearney

Abstract

This paper examines the evolution of monetary policy in Australia since the mid 1980s when financial markets were rapidly deregulated. The paper discusses the conduct of monetary policy within the framework of monetary targeting and how deregulation affected this framework. Alternative strategies for conducting monetary policy are discussed. However, it is argued that since 1985, monetary authorities have often changed the focus of monetary policy with no specific framework within which the policy is implemented. Deregulation has forced interest rates to become the main focus of monetary policy. But, since the deregulation of financial markets, the transmission mechanism by which interest rates affect the economy, has changed significantly.

Suggested Citation

  • M. Monadjemi & C. Kearney, 1990. "Deregulation and the Conduct of Monetary Policy," The Economic and Labour Relations Review, , vol. 1(2), pages 18-33, December.
    • Handle: RePEc:sae:ecolab:v:1:y:1990:i:2:p:18-33
    DOI: 10.1177/103530469000100202
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    References listed on IDEAS

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    1. William Poole, 1969. "Optimal choice of monetary policy instruments in a simple stochastic macro model," Special Studies Papers 2, Board of Governors of the Federal Reserve System (U.S.).
    2. Cagan, Phillip, 1982. "The Choice among Monetary Aggregates as Targets and Guides for Monetary Policy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(4), pages 661-686, November.
    3. David Morgan, 1990. "The Evolution Of Monetary Policy Since Financial Deregulation," Economic Papers, The Economic Society of Australia, vol. 9(4), pages 1-18, December.
    4. William Poole, 1970. "Optimal Choice of Monetary Policy Instruments in a Simple Stochastic Macro Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(2), pages 197-216.
    5. J. S. Marsden & P. L. Jones, 1988. "Monetary And Exchange Rate Policy: A Volatility Based Perspective," Economic Papers, The Economic Society of Australia, vol. 7(1), pages 82-93, March.
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    Cited by:

    1. Mehdi Siamak MONADJEMI & John LODEWIJKS, 2014. "Post Inflation Targeting Monetary Policy: A Study of Britain, Japan and the United States," Expert Journal of Economics, Sprint Investify, vol. 2(1), pages 21-29.
    2. Monadjemi Mehdi S., 2011. "Monetary Policy and Oil Prices," Global Economy Journal, De Gruyter, vol. 11(3), pages 1-18, September.

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