The Role of Central Banks in Managing Monetary Policy and its Effects on the Economy
An Empirical Analysis of Policy Tools, Economic Indicators, and Implications
DOI:
https://doi.org/10.47611/jsrhs.v12i4.5327Keywords:
Central banks, Monetary policy, Economic management, Interest rates, Money supply, Inflation, Policy tools, Microeconomic, Macroeconomic, GDP growth, Employment, Investment, Price stability, Financial stability, Exchange rates, Quantitative easing, Open market operations, Policy rate, Banking system, Financial markets, Policy effectivenessAbstract
This paper examines the crucial role of central banks in managing monetary policy and its profound effects on the economy. It provides an in-depth analysis of the objectives, tools, and strategies employed by central banks to regulate monetary conditions, control inflation, and promote economic stability. Additionally, it explores the transmission mechanisms through which monetary policy decisions impact various sectors of the economy, including interest rates, exchange rates, investment, consumption, and employment. The paper also highlights the challenges and limitations faced by central banks in conducting effective monetary policy, particularly in an era of economic globalization and financial interconnectedness. Overall, this research contributes to a comprehensive understanding of the intricate relationship between central bank actions, monetary policy, and macroeconomic outcomes.
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