№ 4/2017

Fìnansi Ukr. 2017 (4): 75–93

MONETARY POLICY

MISHCHENKO Volodymyr ¹, LON Ihor ²

¹Institute for Economics and Forecasting of the NAS of Ukraine
OrcID ID : https://orcid.org/0000-0002-8565-2686
²Banking University

The role of monetary regulation in stimulating economic growth

The article analyzes the role and functions of the central bank in monetary regulation of the economy and implementation of monetary policy aimed at maintaining economic growth. The authors identify key directions for the improvement of the institutional framework of the monetary regulation in conditions of financial instability and functioning of the central bank as an institution implementing state policy in the monetary sphere. It is shown that the implementation of the main function of the central bank to ensure stability of the national currency must provide for continuity, proportionality, consistency and reliability of monetary circulation and proceed from the necessity to maintain the stability of the banking sector and the financial system as a whole. It is proved that the development and implementation of the monetary policy is part of a more complex process of monetary regulation of the economy, which must take into account the fact that a hierarchical approach to determining the main goals of monetary policy characterizes only the degree of influence and responsibility of the central bank for achieving specific goals, and also contains some contradictions in achieving the objectives at different levels. It is justified that the role of such a policy of the central bank in stimulating economic growth is the formation of certain monetary preconditions, the key ones being macroeconomic stability, the stability of the banking system, balanced state budget and low public debt. It is determined that the combination of an adequate interest rate policy and complex anti-inflation measures are the key areas of indirect influence of the central bank on economic growth.

Keywords:central bank, monetary policy, hierarchy of objectives, monetary cycles, monetary regulation, monetary transmission mechanism, inflation targeting, economic development.

JEL: E52, E58.

Mishchenko V. . The role of monetary regulation in stimulating economic growth / V. . Mishchenko, I. . Lon // Фінанси України. - 2017. - № 4. - C. 75-93.

Article original in Ukrainian (pp. 75 - 93)

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