MONETARY POLICY

SELIVERSTOV Valerii ¹

¹Zaporozhye National Technical University
OrcID ID : https://orcid.org/0000-0003-2601-8834

The impact of instruments of the Bank of England monetary policy on the rate of inflation

Under the current conditions of global finance development, the study of features of profision of the target rate of inflation by monetary policy instruments in order to stimulate economic activity of the country becomes very important. An impact of monetary policy on ensuring the target rate of inflation attracts the attention of scientists and finance practitioners over the last years. However, publications on analysis of the features of the monetary policy conducted by the Bank of England to ensure the target CPI level using regression and autoregressive models can be found infrequently. This article attempts to sort out these issues by exploiting the regression model at the first stage, and the vector autoregression model – at the seconds stage. The method of least squares, built in analysis package program Microsoft Excel, is used for the regression analysis, and ""E-Views” is used to develop the vector error correction model (VEC-model). The following time series are applied in both models: the consumer price index, the discount rate of the Bank of England, the amount of cash in circulation and the price index for basic raw fuel and non-fuel products. The obtained results of the study indicate a lack of convincing arguments about the achievement of the inflation targeting by the Bank of England with solely monetary instruments.

Keywords: target inflation rate, quantitative easing, regression model, vector error correction model.

JEL: E17, E31, G21, C68

SELIVERSTOV V. . The impact of instruments of the Bank of England monetary policy on the rate of inflation / V. . SELIVERSTOV // Фінанси України. - 2014. - № 7. - C. 87-98.