How Monetary Policy Works

Lavan Mahadeva is Monetary Policy Committee Research Advisor to the Bank of England, UK. His Previous book, Monetary Policy Frameworks in a Global Context, is also available from Routledge. Peter Sinclair is Director of the Bank of England Centre for Central Banking Studies and Professor of Economics at the University of Birmingham, UK. His previous book, Financial Stability and Central Banks, is also available from Routledge.

1. Introduction2. The Transmission Mechanism of Monetary Policy Through Interest Rates - Policy Rate Effects on Other Interest Rates, Asset Prices, Consumption and Investment Peter Sinclair3. How Policy Rates Affect Output, Prices and Labour - Open Economy Issues; and Inflation and Disinflation Peter Sinclair4. Model-building in Theory and Practice: The Output Gap Lavan Mahadeva5. Model-building in Theory and Practise: The Philips Curve Lavan Mahadeva6. Transmission Mechanisms and Inflation Targeting - The Case of Columbia's Disinflation Javier Gómez and Juan Manuel Julio7. Monetary Transmission Mechanism in Poland Tomasz Lyziak8. Monetary Policy and Goals for External Competitiveness - A Dynamic General Equilibrium Model for Hungary Áron Gereben9. Monetary Transmission Mechanism - A View from a High Inflation Environment Gülbin Sahinbeyoglu10. Measures of Monetary Policy Transparency and the Transmission Mechanism Richhild Moessner, Toni Gravelle and Peter Sinclair11. Discussant's Comments Marion William, Barbados13. Discussant's Comments David Dodge, Canada14. Discussant's Comments Bimal Jalan, India15. The Monetary Transmission Mechanism in South Africa M.M. Smal and S. de Jager16. What do we know about the Channels of Monetary Transmission in Transition Economies? Hungaries Experience Under the Exchange Rate Targeting Regime Judit Neményi17. Goals and Instruments of Monetary Policy - Past, Present and Future C. Freedman