№ 5/2017

Fìnansi Ukr. 2017 (5): 95–109

MONETARY POLICY

SELIVERSTOV Valerii ¹

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

Features of the implementation of monetary policy by central banks of Canada, Australia, South Korea and Israel

In modern conditions of the domestic financial system, when the National Bank of Ukraine determined the regime of inflation targeting as a priority of monetary policy, the experience of ensuring price stability by central banks of economically developed countries is of particular importance. The increased interest in this problem is due to the implementation by the Federal Reserve System of the United States, the European Central Bank, the Bank of Japan and the Bank of England of an interest rate policy that is approaching zero and quantitative easing. Therefore, this study is an attempt to navigate the specifics of achieving the inflation target by the central banks of Canada, Australia, South Korea and Israel by building the analysis of regression models at the first stage and the vector error correction models (VEC-models) at the second stage. In both simulations the following time series are used: Consumer Price Index, Overnight Rate, Currency in Circulation and Index PALLFNFW. The results of the research suggest the possibility of a situation in which an increase in interest rates may not be a sufficiently effective tool for countering inflation. In turn, an excessive rise in interest rates could adversely affect the conditions of lending by domestic commercial banks to the real economy. In the context of achieving the target level of inflation, the issues of regulating the size of the monetary base, together with refinancing commercial banks and the rational exchange rate of the national currency, as well as antitrust actions of the government, come to the fore. In addition, it should be noted that the non-monetary levers of the Ukrainian government have a negligible impact on pricing, which significantly complicates the provision of the target level of inflation with the help of exclusively monetary instruments.

Keywords:consumer price index, overnight rate, cash in circulation, PALLFNFW index, regression model, auto-regression model.

JEL: E52, E58.

SELIVERSTOV V. . Features of the implementation of monetary policy by central banks of Canada, Australia, South Korea and Israel / V. . SELIVERSTOV // Фінанси України. - 2017. - № 5. - C. 95-109.

Article original in Ukrainian (pp. 95 - 109)

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