Central Banking and Monetary Policy in the Asia Pacific

The strength of this book is that it summarises a vast amount of the modern literature in monetary economics. . . the book provides detailed and clear descriptions of monetary models.

Central Banking and Monetary Policy in the Asia Pacific

The strength of this book is that it summarises a vast amount of the modern literature in monetary economics. . . the book provides detailed and clear descriptions of monetary models. . . This comprehensive volume is a useful compendium of the monetary economics literature of the second half of the 20th century, which has to a certain extent been over taken by events. Paul Wachtel, Asian-Pacific Economic Literature This well-researched and finely crafted book is a valuable addition to the literature on monetary policy in developing countries. It explains the concepts and tools of monetary policy in a simple manner and discusses how monetary policy works in developing Asia in a historical context within the framework of an outward-oriented development strategy. I am not aware of any other book that covers the organisational and institutional aspects of major central banks in developing Asia. Prema-chandra Athukorala, Australian National University This book elaborates the key concepts, principles and models of inflation and monetary policy and explains how they remain relevant and useful to the design and conduct of monetary policy in developing Asia. In this rapidly growing region, price stability remains important and therefore monetary policy has gained increasing importance. Even while emphasising the importance of the classical approach, the book discusses alternative frameworks and points out areas where a consensus is emerging. The review of the literature is extensive and careful. Along with developing this theme, the book reviews the structure and governance of most central banks in the Asia-Pacific and discusses how they conduct monetary policy to achieve price stability under different monetary policy frameworks. The book fills a gap in the central banking and monetary policy literature and has no close competitors. It should be useful to both students and policymakers in developing Asia. Salim Rashid, University of Illinois, US The 1997 East Asia crisis exposed many economic policy weaknesses in the Asia-Pacific region. In his latest book, Dr Hossain provides students with a refreshing up-to-date reference text on the concepts and principles of money, banking and finance in developing countries which differ in many ways to monetary institutions and practices in developed countries, which conventional monetary textbooks focus on. I thoroughly recommend it. A.P. Thirlwall, University of Kent, UK This timely book reviews the modern literature on inflation and monetary policy, and highlights contemporary issues in the design and conduct of monetary policy for price stability in developing Asia. Akhand Akhtar Hossain surveys the evolution of central banking and provides an introduction to the structure, function and governance of central banks in selected countries in the Asia-Pacific. The author also examines the major theories, models and approaches to inflation and monetary policy, and evaluates monetary policy regimes in selected countries in the Asia-Pacific in a historical context. This eloquent and comprehensible book will prove to be invaluable to undergraduate students on monetary theory and policy as well as banking and financial courses. Researchers exploring monetary policy concepts, principles and case studies will warmly welcome this book, as will policy-makers who have an interest in macroeconomics, monetary and financial policies.

Central Bank Governance and the Role of Nonfinancial Risk Management

Financial Independence and Accountability for Central Banks, 2014 (London: Central Banking Publications). Bayoumi, T, G. Dell'Ariccia, ... 2014, Modern Monetary Policy and Central Bank Governance (London: Edward Elgar Publishing).

Central Bank Governance and the Role of Nonfinancial Risk Management

This paper argues that nonfinancial risk management is an essential element of good governance of central banks. It provides a funnelled analysis, on the basis of selected literature, by (i) presenting an outline of central bank governance in general; (ii) zooming in on internal governance and organization issues of central banks; (iii) highlighting the main issues with nonfinancial risk management; and (iv) ending with recommendations for future work. It shows how attention for nonfinancial risk management has been growing, and how this has amplified the call for better governance of central banks. It stresses that in the area of nonfinancial risk management there are no crucial differences between commercial and central banks: both have people, processes, procedures, and structures. It highlights policy areas to be explored.

Aspects of Modern Monetary and Macroeconomic Policies

The new governance is today the focal point of modern monetary policy. The term 'governance' refers to the relationship between the central bank and the government, the elected representatives and/or the general public and to the ...

Aspects of Modern Monetary and Macroeconomic Policies

Within the New Consensus Macroeconomics, monetary policy is upgraded while fiscal policy is downgraded. This new monetary policy has been the main instrument of policy under the guise of inflation targeting, an approach pursued by a number of central banks worldwide. This book raises problems relating to this new monetary and macroeconomic policy.

Central Banking

Surprisingly, Central Banks remain strong and respected. Indeed, a positive halo continues to hang over them. Yet, few people understand how Central Banks work. This is why Thammarak’s book is truly timely.

Central Banking

Understand the theories and interpret the actions of modern central banks Central Banking takes a comprehensive look at the topic of central banking, and provides readers with an understanding and insights into the roles and functions of modern central banks in advanced as well as emerging economies, theories behind their thinking, and actual operations practices. The book takes a systematic approach to the topic, while providing an accessible format and style that is appropriate for general audiences and students with only a minimal macroeconomic background. Theoretical reviews and examples of how the theories are applied in practice are presented in an easy-to-understand manner and serve as a guide for readers to further investigate specific ancillary central banking topics and as a means to make informed judgments about central bank actions. Important topics covered in the book include: Evolution of central banking functions and the international monetary system Theoretical backgrounds that are the foundation to the modern practice of monetary policy Monetary policy regimes, including exchange rate targeting, money supply growth targeting, the risk management approach, inflation targeting, and unconventional monetary policy. Actual practice in market operations and transmission mechanisms of monetary policy The exchange rate and central banking Theoretical backgrounds related to various dimensions of financial stability Current developments with regards to sustaining financial stability The future of central banking in the wake of the 2007-2010 global financial crisis Case studies on relevant practical issues and key concepts in central banking Designed as essential reading for students, market analysts, investors, and central banks' new recruits, Central Banking better positions readers to interpret the actions of central banks and to understand the complexities of their position in the global financial arena.

Monetary Policy Transmission in Emerging Markets and Developing Economies

Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT).

Monetary Policy Transmission in Emerging Markets and Developing Economies

Central banks in emerging and developing economies (EMDEs) have been modernizing their monetary policy frameworks, often moving toward inflation targeting (IT). However, questions regarding the strength of monetary policy transmission from interest rates to inflation and output have often stalled progress. We conduct a novel empirical analysis using Jordà’s (2005) approach for 40 EMDEs to shed a light on monetary transmission in these countries. We find that interest rate hikes reduce output growth and inflation, once we explicitly account for the behavior of the exchange rate. Having a modern monetary policy framework—adopting IT and independent and transparent central banks—matters more for monetary transmission than financial development.

Modern Money

This is then linked to Lerner's quot;functional financequot; approach to money and government spending.

Modern Money

All modern economies have a quot;chartalistquot; or quot;statequot; money, as acknowledged by Friedrich Knapp and J.M. Keynes. In this paper, I examine the quot;historyquot; of money to shed light on its origins. I also examine in detail the views of those who accepted the chartalist, or state, approach to money, from Adam Smith to Knapp and Keynes, with some discussion of the views of Hyman Minsky and Abba Lerner. This is then linked to Lerner's quot;functional financequot; approach to money and government spending. I next explore the implications of quot;modern moneyquot; for government policy, and show that much economic analysis reaches erroneous conclusions because it fails to recognize the nature of modern money. The state quot;definesquot; money when it chooses that in which taxes must be paid. Government spending is the most important determinant of the supply of base money; government deficits are the most important source of net money holdings. This stands in stark contrast to traditional analysis, for fiscal policy is the primary determinant of the money supply. On the other hand, monetary policy determines the short term interest rate. Because government deficits increase bank reserves, monetary policy is required to offer an interest-earning alternative to excess reserves; essentially, monetary policy consists of sales of government bonds (by the Treasury and Central Bank) to quot;drainquot; excess reserves in order to hit the interest rate target established for monetary policy. Thus, bond sales are not a part of fiscal policy, nor are they needed to quot;financequot; government deficits. This analysis then leads to several interesting policy conclusions regarding importance of government deficits and debts, as well as proposals to promote full employment.

Central Banking in Turbulent Times

The Politics of Central Bank Independence. Discussion Paper, No. 2016–047, Tilburg University, Center for Economic Research. Eijffinger, S., and Masciandaro, D. (2014). Modern Monetary Policy and Central Bank Governance: A Story of Two ...

Central Banking in Turbulent Times

Central banks came out of the Great Recession with increased power and responsibilities. Indeed, central banks are often now seen as 'the only game in town', and a place to put innumerable problems vastly exceeding their traditional remit. These new powers do not fit well, however, with the independence of central banks, remote from the democratic control of government. Central Banking in Turbulent Times examines fundamental questions about the central banking system, asking whether the model of an independent central bank devoted to price stability is the final resting point of a complex development that started centuries ago. It dissects the hypothesis that the Great Recession has prompted a reassessment of that model; a renewed emphasis on financial stability has emerged, possibly vying for first rank in the hierarchy of objectives of central banks. This raises the risk of dilemmas, since the Great Recession brought into question implicit assumptions that the pursuit of price stability would also lead to financial stability. In addition, the border between monetary and fiscal policy was blurred both in the US and in Europe. Central Banking in Turbulent Times asks whether the model prevailing before the Great Recession has been irrevocably altered. Are we entering, as Charles Goodhart has hypothesized, into the 'fourth epoch' of central banking? Are changes to central banks part of a move away from the global liberal order that seemed to have prevailed at the turn of the century? Central Banking in Turbulent Times seeks to answer these questions as it examines how changes can allow for the maintenance of price stability, while adapting to the long-term consequences of the Great Recession.

Money

He presents a great model for the future too with essays on how to tell real from fake gold standards, how to calculate the money supply and follow what the Fed is up to, and how to reform the international monetary system to keep money ...

Money


Reconceptualising Global Finance and its Regulation

The modern economies are based on nominal contracts, including wages and financial contracts. Other things being equal, the contracts are based ... “Modern Monetary Policy and Central Bank Governance”, Edward Elgar, Cheltenham (2014).

Reconceptualising Global Finance and its Regulation

Taking stock of the 2008 global financial crisis, this book provides 'outside the box' solutions for reforming international financial regulation.

Good Governance in Sub Saharan Africa

However, more reforms are needed to ensure the adequacy of mandates and modern monetary policy frameworks. Central bank independence and transparency appear to be strong in the three countries considered. Based on the 2016 and 2012 ...

Good Governance in Sub Saharan Africa

Governance and corruption issues have taken the center stage in international discussions, especially after the adoption by the IMF in 2018 of a new framework for engagement on governance and corruption. Sound institutions that guarantee integrity in the management of public affairs are critical on the path toward higher and more inclusive growth. Corruption undermines the quality of institutions, weakens the effectiveness of government programs, and compromises social trust in government policies. Indeed, countries around the world that improved their governance systems are reaping a “governance dividend,” and governance-enhancing reformist countries in sub-Saharan Africa include Botswana, Rwanda, and Seychelles. In addition, Liberia, Sierra Leone, and Angola demonstrate that important reforms are possible, including in fragile environments. The importance of good governance has acquired even more importance as countries try to introduce policies to fight the ongoing COVID-19 pandemic. Special attention to governance in an emergency context, including situations associated with conflict, other health crises and natural disasters, is therefore essential. Innovation and new technologies are critical instruments that policymakers can use in their efforts to improve governance and transparency.

Central Banks in Organizational Networks

The book challenges common-held assumptions on how central banking works and critically assesses unconventional monetary policy and its underlying theoretical tenets.

Central Banks in Organizational Networks

"This interdisciplinary and wide-ranging study unravels the social processes of decision-making at the interface of central banks and financial market participants and thereby raises important questions about responsible central bank governance and its obligations to other stakeholders in society. The book challenges common-held assumptions on how central banking works and critically assesses unconventional monetary policy and its underlying theoretical tenets. Drawing from rich, multi-sited fieldwork and data collection, this research monograph offers an in-depth look into the financial market practices around the quantitative easing programs of the European Central Bank and focuses on the uneasy role of modern central banks as active market participants. The author introduces concepts from social network theory and develops a novel method to study organisational networks in the context of financial markets. An analysis of the European Central Bank's social, organisational and financial networks is sketched over the course of multiple chapters. The concluding chapters dive into documentary analysis and the extensive material from qualitative interviews with senior investment professionals about the strategies and adaptive processes around the lived experience of quantitative easing. The book will be a vital resource for social scientists researching organisations in financial markets, providing theory, concepts and empirical data to work with. It will be of interest to academics and graduate students in economics, sociology and management/organisation studies, as well as practitioners at central banks and in asset management"--

Behavioral Finance The Coming Of Age

Down, I. (2008), Central bank independence, disinflations and monetary policy. Business and Politics 10(3). ... (2014), Modern Monetary Policy and Central Bank Governance, Edward Elgar Publishing Ltd., Cheltenham.

Behavioral Finance  The Coming Of Age

The area of behavioral finance, though relatively young, has matured and spread beyond its initial objectives: to demonstrate the fallibility of the efficient market hypothesis, to shake the belief in the ubiquity of rational decision making, and to convince the finance world of the importance of psychological biases in decision making. The success of the field in meeting its goals, however, has called into question its continued relevance. Behavioral finance is thus currently at a crossroads, and researchers need to decide which way they should turn for the area to continue to thrive and to meaningfully contribute to financial knowledge.This collection of papers deals with rarely-explored topics to point at new directions that behavioral finance should explore to maintain its viability, along with contributions to traditional topics. Some of these topics include innovations, the psychology of policy-makers, biases of peer-to-peer market participants, the behavior and motivation behind corporate social responsibility, and the design of exchanges. Additionally, well-known topics such as the disposition effect, slow and fast decisions and the availability heuristic are revisited, and surprising new findings are presented.By opening the field to novel avenues of discussion, this book addresses the future of behavioral finance and its transition into a new era.

The Behavioural Finance Revolution

Driffil, J. and Rotondi, Z. 2007, Inertia in Taylor Rules, CEPR Discussion Paper Series, no. 6570. Eijffinger, S.C. and Masciandaro, D. (eds) 2014, Modern Monetary Policy and Central Bank Governance, Cheltenham, UK and Northampton, MA, ...

The Behavioural Finance Revolution

Financial markets are complex. Regulators strive to predict ways in which they can malfunction and create rules to prevent this from happening, yet behavioural impacts are often overlooked. This book explores how behavioural finance can go hand-in-hand with traditional methods to help banks and regulators create better policies. It also demonstrates how the behavioural finance revolution has opened the way to a more integrated approach to the analysis of economic phenomena.

Understanding Modern Money

By showing that the basic assumptions if mainstream macroeconomics were and are flawed, the author aims to convince the reader that full employment and price stability are fully compatible goals in the modern world.

Understanding Modern Money

By showing that the basic assumptions if mainstream macroeconomics were and are flawed, the author aims to convince the reader that full employment and price stability are fully compatible goals in the modern world.

Modern Monetary Theory and European Macroeconomics

The central bank is required by law to credit the government's account. It can't say no. The balance sheets look like this: central bank government t-bonds 105 reserves 105 reserves 105 t-bonds 205 net wealth –100 The Treasury bond was ...

Modern Monetary Theory and European Macroeconomics

This book provides a new methodological approach to money and macroeconomics. Realizing that the abstract equilibrium models lacked descriptions of fundamental issues of a modern monetary economy, the focus of this book lies on the (stylized) balance sheets of the main actors. Money, after all, is born on the balance sheets of the central bank or commercial bank. While households and firms hold accounts at banks with deposits, banks hold an account at the central bank where deposits are called reserves. The book aims to explain how the two monetary circuits – central bank deposits and bank deposits – are intertwined. It is also shown how government spending injects money into the economy. Modern Monetary Theory and European Macroeconomics covers both the general case and then the Eurozone specifically. A very simple macroeconomic model follows which explains the major accounting identities of macroeconomics. Using this new methodology, the Eurozone crisis is examined from a fresh perspective. It turns out that not government debt but the stagnation of private sector debt was the major economic problem and that cuts in government spending worsened the economic situation. The concluding chapters discuss what a solution to the current problems of the Eurozone must look like, with scenarios that examine a future with and without a euro. This book provides a detailed balance sheet view of monetary and fiscal operations, with a focus on the Eurozone economy. Students, policy-makers and financial market actors will learn to assess the institutional processes that underpin a modern monetary economy, in times of boom and in times of bust.

Money Theory and Practice

Lastly, the book discusses the relation between monetary policy and financial stability, addressing systemic risk and the role of macro-prudential regulation.

Money  Theory and Practice

This textbook provides an introduction to modern monetary economics for advanced undergraduates, highlighting the lessons learned from the recent financial crisis. The book presents both the core New Keynesian model and recent advances, taking into account financial frictions, and discusses recent research on an intuitive level based on simple static and two-period models, but also prepares readers for an extension to a truly dynamic analysis. Further, it offers a systematic perspective on monetary policy, covering a wide range of models to help readers gain a better understanding of controversial issues. Part I examines the long-run perspective, addressing classical monetary policy issues such as determination of the price level and interaction between monetary and fiscal policy. Part II introduces the core New Keynesian model, characterizing optimal monetary policy to stabilize short-term shocks. It discusses rules vs. discretion and the challenges arising from control errors, imperfect information and robustness issues. It also analyzes optimal control in the presence of an effective lower bound. Part III focuses on modelling financial frictions. It identifies the transmission mechanisms of monetary policy via banking and introduces models with incomplete markets, principal-agent problems, maturity mismatch and leverage cycles, to show why investors’ and intermediaries’ own stakes play a key role in lending with pro-cyclical features. In addition, it presents a tractable model for handling liquidity management and demonstrates that the need to sell assets in crisis amplifies the volatility of the real economy. Lastly, the book discusses the relation between monetary policy and financial stability, addressing systemic risk and the role of macro-prudential regulation.

Reforming the IMF

The authors examine the institutional and governance framework of modern central banks to determine whether there are lessons that can be applied to the International Monetary Funds' (IMF & rsquo;s) institutional framework.

Reforming the IMF


Modern Money Theory

What is “coming back” to the government when taxes are paid? The government's own currency. It is harder to see that now because modern governments have their own banks – central banks – that make and receive payments for them.

Modern Money Theory

This second edition explores how money 'works' in the modern economy and synthesises the key principles of Modern Money Theory, exploring macro accounting, currency regimes and exchange rates in both the USA and developing nations.

Designing Central Banks

With that foundation, the book will then turn to a series of contemporary themes. Firstly, this book looks at independence, how central banks can actually influence their respective economies, goals, responsibilities and governance.

Designing Central Banks

The activities of central banks are relevant to everyone in society. This book starts by considering how and why in general central banks evolved and specifically the special aspects of the contribution of the Northern European Central Banking Tradition. With that foundation, the book will then turn to a series of contemporary themes. Firstly, this book looks at independence, how central banks can actually influence their respective economies, goals, responsibilities and governance. This collection of papers, formulated from the joint conference of the Bank of Finland and the Deutsche Bundesbank in November 2007, will help motivate continuing research into the institutional design of central banks and promote a better understanding of the many challenges central banks are facing today. This volume gives a detailed perspective on the benefits of price stability and central bank independence and, due to the advances in macroeconomic theory, has prompted a substantial rethink on central banks’ institutional design. With contributions from such scholars as Anne Sibert and Forrest Capie and a foreword by Erkki Liikanen and Professor Axel A. Weber, this volume will be useful reading for monetary economists around the world as well as all those with an interest in central banks and banking more generally.

Debating Modern Monetary Theory

from the involvement of the central bank and the private banking system in that process. In the old days, governments just notched tally sticks, minted coins, or printed paper money as currency to spend. It was obvious: government spent ...

Debating Modern Monetary Theory

This book considers the theoretical and empirical claims of Modern Monetary Theory (MMT) in developed and developing countries. It is structured as a debate between leading MMT theorists and MMT critics. MMT threw down a challenge to mainstream economics and forced it to respond, above all in the USA. This is a rare occurrence, almost unknown, for heterodox economics during the last few decades. It is not surprising, therefore, that MMT has attracted strong attention from a broad swathe of researchers. It is even less surprising that it has become the theoretical vehicle of choice for political activists opposing austerity. Its influence is remarkable and has gradually spread to other social disciplines, including even cultural theory. Furthermore, the policy responses to coronavirus by several governments, particularly the extraordinary expansion of central bank balance sheets in 2020, appears to support MMT in practice. This volume takes into account the rising popularity of MMT and considers its theoretical claims in depth, since popularity does not necessarily equate to being right in theory. It also considers MMT claims regarding fiscal and monetary policy in view of the implications of the pandemic crisis for public spending and public debt. It is not accidental that the strongest support for MMT, in both theory and policy, is to be found in the USA, since MMT conclusions rely heavily on close institutional analysis of US government financing mechanisms. The chapters in this book were originally published as a special issue of The Japanese Political Economy.