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The transmission channels of monetary policy in monetary theory
[Les canaux de transmission de la politique monétaire dans la théorie monétaire]

Author

Listed:
  • Merrahi Bouchra

    (ENCG - PhD student, Organizational management sciences research laboratory. National School of Commerce and Management/ Ibn Tofail University.)

  • Hamid Ait Lemqeddem

    (ENCG - Academic Professor, Organizational management sciences research laboratory. National School of Commerce and Management/ Ibn Tofail University.)

Abstract

The primary objective of monetary policy lies in safeguarding macroeconomic stability, particularly by mitigating cyclical fluctuations and controlling inflationary pressures. However, contemporary monetary policies are implemented in an environment increasingly characterized by uncertainty regarding the scope and nature of their real effects on the economy. Although monetary policy remains a fundamental instrument of economic regulation, it can generate unexpected, and at times undesirable, side effects. The effective conduct of such policy thus necessitates a rigorous assessment of its impact on key macroeconomic variables. This requirement entails a thorough understanding of the transmission mechanisms through which monetary decisions affect the real economy. These mechanisms include, among others, the effects of interest rates, exchange rates, asset prices, and the credit channel. In this context, the present article aims to examine the impact of monetary policy decisions on economic activity, through an analysis that draws on both theoretical frameworks and empirical findings.

Suggested Citation

  • Merrahi Bouchra & Hamid Ait Lemqeddem, 2025. "The transmission channels of monetary policy in monetary theory [Les canaux de transmission de la politique monétaire dans la théorie monétaire]," Post-Print hal-05069798, HAL.
    • Handle: RePEc:hal:journl:hal-05069798
    DOI: 10.5281/zenodo.15394135
    Note: View the original document on HAL open archive server: https://hal.science/hal-05069798v1
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    References listed on IDEAS

    as
    1. Sebastian Edwards, 2006. "The Relationship Between Exchange Rates and Inflation Targeting Revisited," NBER Working Papers 12163, National Bureau of Economic Research, Inc.
    2. Michael Bruno & William Easterly, 1996. "Inflation and growth: in search of a stable relationship," Review, Federal Reserve Bank of St. Louis, vol. 78(May), pages 139-146.
    3. Frederic S. Mishkin, 1995. "Symposium on the Monetary Transmission Mechanism," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 3-10, Fall.
    4. Michael Woodford, 2003. "Optimal Interest-Rate Smoothing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(4), pages 861-886.
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