The bursting of the Japanese bubble economy in the early 1990s put the stage for a lasting low-, zero-, and negative-interest rate environment, which fundamentally changed the business environment for the Japanese commercial banks. On the income side, with interest margins becoming increasingly...

The Taylor (1993) rule for determining interest rates is generalized to account for three additional variables: The money supply, money velocity, and the unemployment rate. Thus, five parameters, i.e. weights assigned to the deviation in the inflation rate, the deviation in real GDP (Gross...

Communication has become a vital part of modern monetary policy, and its importance is even higher during a crisis when a central bank has to calm the markets down. This paper studies the information content of different styles of communication from individual central bank policymakers in the...

The global financial crisis and the coronavirus pandemic were marked by expansionary policies of key central banks in an attempt to stop the recession. The degree of expansiveness of monetary policy was unprecedented. As a result of expansionary policies, global inflation has been present since...

Monetary policy tools, including money supply and interest rate, are the most popular instruments to control inflation around the globe. It is assumed that a tight monetary policy, either in form of reduction in money supply or an increase in interest rate, will reduce inflation by reducing...

The first central banks were founded in the XVII century and monetary policy has been evolving ever since. Knowledge on monetary economy has improved significantly over the last couple of decades and a consensus has been reached in a number of areas. As a result, hyperinflations have been...

Federal Reserve Chairman William McChesney Martin famously declared that the Federal Reserve 'is in the position of the chaperone who has ordered the punch bowl removed just when the party was really warming up.' This paper uses the punch bowl metaphor to analyse how the Federal Reserve can...