IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/75648.html
   My bibliography  Save this paper

A Historical Retrieval of the Methods and Functions of Monetary Policy

Author

Listed:
  • Hassan, Sherif Maher

Abstract

There exists a broad implicit agreement that steering the monetary policy has important consequences for the whole economy (Friedman, 1968). This book uses topic classification to present a historical retrieval of the main theories and applications of the monetary policy within different schools of economic thinking and across history. From Humes’ automatic price-species flow in the 17th century, to the Keynesians, Monetarists and Austrians perspectives of the monetary dynamics in the beginning of the 19th century. The second chapter provides a general overview about how the monetary authority can fine tune monetary indicators in response to business cycle shocks. This part will discuss the monetary transmission mechanisms that represent the different means of interaction between monetary tools together and their impact on the real economy. In this context, the concept of inflation targeting will be elaborated in details while explaining its main institutional and economic prerequisites. The third and final chapter is devoted to giving an overview of the Egyptian monetary policy from 1990 to 2010 prior to the Egyptian revolution. The detailed analysis disaggregates this period into three eras: the first starts from 1991 till 1996 (ERSAP era), the second from 1996 till 2003 (Transitional era), and the third from 2003 till 2010 (towards Inflation Targeting era). This part of the book covers the broad changes occurred in the Egyptian monetary regimes and how well the successive governments used various monetary tools to achieve their policy goals and to mitigate real economic problems like unemployment and inflation.

Suggested Citation

  • Hassan, Sherif Maher, 2016. "A Historical Retrieval of the Methods and Functions of Monetary Policy," MPRA Paper 75648, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:75648
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/75648/2/MPRA_paper_75648.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. N. G. Mankiw., 2009. "The Macroeconomist as Scientist and Engineer," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
    2. Taylor, John B., 2000. "Low inflation, pass-through, and the pricing power of firms," European Economic Review, Elsevier, vol. 44(7), pages 1389-1408, June.
    3. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    4. Disyatat, Piti & Galati, Gabriele, 2007. "The effectiveness of foreign exchange intervention in emerging market countries: Evidence from the Czech koruna," Journal of International Money and Finance, Elsevier, vol. 26(3), pages 383-402, April.
    5. Olivier Blanchard & Jordi Galí, 2007. "Real Wage Rigidities and the New Keynesian Model," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(s1), pages 35-65, February.
    6. Kitov, Ivan, 2009. "The anti-Phillips curve," MPRA Paper 13641, University Library of Munich, Germany.
    7. Claudio Soto & Jorge Selaive, 2003. "Openness and Imperfect Pass-Through: Implications for the Monetary Policy," Working Papers Central Bank of Chile 216, Central Bank of Chile.
    8. Alan S. Blinder, 1986. "Keynes after Lucas," Eastern Economic Journal, Eastern Economic Association, vol. 12(3), pages 209-216, Jul-Sep.
    9. Robert Dimand, 1988. "The Origins of the Keynesian Revolution," Books, Edward Elgar Publishing, number 139.
    10. Lucas, Robert E, Jr, 1973. "Some International Evidence on Output-Inflation Tradeoffs," American Economic Review, American Economic Association, vol. 63(3), pages 326-334, June.
    11. Mr. Paul R Masson & Mr. Miguel A Savastano & Mr. Sunil Sharma & Guy Debelle, 1998. "Inflation Targeting as a Framework for Monetary Policy," IMF Economic Issues 1998/005, International Monetary Fund.
    12. Frederic S. Mishkin, 2000. "Inflation Targeting in Emerging-Market Countries," American Economic Review, American Economic Association, vol. 90(2), pages 105-109, May.
    13. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
    14. Ignacio Briones & Hugh Rockoff, 2005. "Do Economists Reach a Conclusion on Free-Banking Episodes?," Econ Journal Watch, Econ Journal Watch, vol. 2(2), pages 279-324, August.
    15. Paul R. Masson & Miguel A. Savastano & Sunil Sharma, 2019. "The Scope for Inflation Targeting in Developing Countries," World Scientific Book Chapters, in: Macroeconomic Modelling and Monetary and Exchange Rate Regimes, chapter 10, pages 331-383, World Scientific Publishing Co. Pte. Ltd..
    16. Thomas J. Sargent, 1973. "Rational Expectations, the Real Rate of Interest, and the Natural Rate of Unemployment," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 4(2), pages 429-480.
    17. Zaki, Mokhlis Y., 2001. "IMF-Supported Stabilization Programs and their Critics: Evidence from the Recent Experience of Egypt," World Development, Elsevier, vol. 29(11), pages 1867-1883, November.
    18. Charles Freedman & Mr. Douglas Laxton, 2009. "Why Inflation Targeting?," IMF Working Papers 2009/086, International Monetary Fund.
    19. A. C. Pigou, 1917. "The Value of Money," The Quarterly Journal of Economics, Oxford University Press, vol. 32(1), pages 38-65.
    20. Guy Debelle & Miguel A Savastano & Paul R Masson & Sunil Sharma, 1998. "Inflation Targeting as a Framework for Monetary Policy," IMF Economic Issues 15, International Monetary Fund.
    21. Frederic S. Mishkin, 2001. "The Transmission Mechanism and the Role of Asset Prices in Monetary Policy," NBER Working Papers 8617, National Bureau of Economic Research, Inc.
    22. Edward Nelson, 2007. "Milton Friedman and U.S. monetary history: 1961-2006," Review, Federal Reserve Bank of St. Louis, vol. 89(May), pages 153-182.
    23. Milton Friedman & Anna J. Schwartz, 1965. "The Great Contraction, 1929–33," NBER Books, National Bureau of Economic Research, Inc, number frie65-1.
    24. Piti Disyatat & Gabriele Galati, 2005. "The effectiveness of foreign exchange intervention in emerging market countries," BIS Papers chapters, in: Bank for International Settlements (ed.), Foreign exchange market intervention in emerging markets: motives, techniques and implications, volume 24, pages 97-113, Bank for International Settlements.
    25. Edmund S. Phelps, 1968. "Money-Wage Dynamics and Labor-Market Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 76, pages 678-678.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Akhand Akhtar Hossain, 2009. "Central Banking and Monetary Policy in the Asia-Pacific," Books, Edward Elgar Publishing, number 12777.
    2. Thorvardur Tjörvi Ólafsson, 2006. "The New Keynesian Phillips Curve: In Search of Improvements and Adaptation to the Open Economy," Economics wp31_tjorvi, Department of Economics, Central bank of Iceland.
    3. Fabrizio Coricelli & Balázs Égert & Ronald MacDonald, 2006. "Monetary Transmission in Central and Eastern Europe: Gliding on a Wind of Change," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue 1, pages 44-87.
    4. Marjan Petreski, 2009. "A Critique On Inflation Targeting," Journal Articles, Center For Economic Analyses, pages 11-24, December.
    5. Syed Kumail Abbas Rizvi & Bushra Naqvi & Sayyid Salman Rizavi, 2012. "What Does Pakistan Have to Join the Inflation Targeters’ Club—a Royal Flush or a Seven-Deuce Offsuit?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(2), pages 35-62, July-Dec.
    6. Ghosh, Atish R. & Ostry, Jonathan D. & Chamon, Marcos, 2016. "Two targets, two instruments: Monetary and exchange rate policies in emerging market economies," Journal of International Money and Finance, Elsevier, vol. 60(C), pages 172-196.
    7. Gomes, Orlando, 2009. "A two-dimensional non-equilibrium dynamic model," Structural Change and Economic Dynamics, Elsevier, vol. 20(3), pages 221-238, September.
    8. Amato, Jeffery D. & Gerlach, Stefan, 2002. "Inflation targeting in emerging market and transition economies: Lessons after a decade," European Economic Review, Elsevier, vol. 46(4-5), pages 781-790, May.
    9. Rene Tapsoba & Hippolyte W. Balima & Eric G. Kilama, 2017. "Settling the Inflation Targeting Debate: Lights from a Meta-Regression Analysis," IMF Working Papers 2017/213, International Monetary Fund.
    10. Barbara Annicchiarico & Fabio Di Dio & Francesco Felici & Francesco Nucci, "undated". "Macroeconomic Modelling and the Effects of Policy Reforms: an Assessment for Italy using ITEM and," Working Papers 1, Department of the Treasury, Ministry of the Economy and of Finance.
    11. Ngalawa, Harold & Viegi, Nicola, 2013. "Interaction of formal and informal financial markets in quasi-emerging market economies," Economic Modelling, Elsevier, vol. 31(C), pages 614-624.
    12. Mankiw, N Gregory, 2001. "The Inexorable and Mysterious Tradeoff between Inflation and Unemployment," Economic Journal, Royal Economic Society, vol. 111(471), pages 45-61, May.
    13. Olivier Blanchard, 2018. "Distortions in Macroeconomics," NBER Macroeconomics Annual, University of Chicago Press, vol. 32(1), pages 547-554.
    14. Pedro Garcia Duarte, 2012. "Not Going Away? Microfoundations in the Making of a New Consensus in Macroeconomics," Chapters, in: Microfoundations Reconsidered, chapter 6, Edward Elgar Publishing.
    15. Giray Gozgor, 2013. "The New Keynesian Phillips Curve in an Inflation Targeting Country: The Case of Turkey," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 6(1), pages 7-18, April.
    16. Pierpaolo Benigno & Luca Antonio Ricci, 2008. "The Inflation-Unemployment Trade-Off at Low Inflation," NBER Working Papers 13986, National Bureau of Economic Research, Inc.
    17. Frederick van der Ploeg, 2005. "Back to Keynes?," CESifo Economic Studies, CESifo, vol. 51(4), pages 777-822.
    18. Xu, Qifa & Niu, Xufeng & Jiang, Cuixia & Huang, Xue, 2015. "The Phillips curve in the US: A nonlinear quantile regression approach," Economic Modelling, Elsevier, vol. 49(C), pages 186-197.
    19. Frederic S. Mishkin, 2011. "Monetary Policy Strategy: Lessons from the Crisis," NBER Working Papers 16755, National Bureau of Economic Research, Inc.
    20. Norman Loayza & Raimundo Soto, 2002. "Inflation Targeting: An Overview," Central Banking, Analysis, and Economic Policies Book Series, in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.),Inflation Targeting: Desing, Performance, Challenges, edition 1, volume 5, chapter 1, pages 001-022, Central Bank of Chile.

    More about this item

    Keywords

    Monetary policy; Egypt; inflation targeting;
    All these keywords.

    JEL classification:

    • B2 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925
    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:75648. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.