BazEkon - The Main Library of the Cracow University of Economics

BazEkon home page

Main menu

Koronowski Adam
Skuteczność polityki pieniężnej w obliczu wstrząsów podażowych i popytowych - nie tylko o pułapce płynności
The effectiveness of the monetary policy in the face of supply and demand shocks - not only on the liquidity trap
Bank i Kredyt, 2005, nr 3, s. 29-37, bibliogr. 11 poz.
Polityka pieniężna, Funkcja produkcji, Model wzrostu gospodarczego, Pułapka płynności
Monetary policy, Production function, Economic growth model, Liquidity trap
W artykule omówiono model, który opisuje i pozwala na interpretację różnorodnych sytuacji ograniczenia możliwości prowadzenia antyrecesyjnej polityki pieniężnej przez bank centralny, wynikających z wymogu zachowania stabilnych cen. W teoretycznej analizie przedstawiono jednoczesne wystąpienie spadku produkcji (recesji jako efektu negatywnego wstrząsu) oraz presji inflacyjnej.

The article aims at indicating limitations to the effectiveness of the monetary policy other than the liquidity trap that has been widely discussed recently and is identified nowadays with the ceiling of zero nominal interest rates. The identified limitations include primarily a discrepancy between price stability as a goal of the central bank and the central bank's ability to use monetary policy (interest rate policy) to counteract the decrease in output resulting from demand or supply shocks. The article also points at the cost of wasteful use of capital in the case of negative real interest rates. Due to this cost, the policy of counteracting the decrease in output by lowering interest rates may not be not optimal in terms of the social welfare. Within this framework, the model presented in the article enables to explain the phenomenon of stagflation as a result of a negative supply shock. The conclusions drawn from the model also indicate that counteracting the increase in consumer spending (the decrease in propensity to save) and its inflationary effects with the monetary policy leads to a decrease output. The observation has been developed in order to analyse the optimal economic policy mix. It leads to a conclusion - in line with the Solow's golden rule - that the optimal mix is assured by the fiscal policy coherent with the zero natural interest rate. The model well expresses the "ambiguous role" of saving, indicating that an increase in propensity to save allows to lower the interest rate that guarantees price stability and to generate an output growth. However, it poses the threat of shaping the real natural interest rate. The general conclusion which can be formed on the basis of the conducted model analysis is that a monetary policy restricted by the requirement of price stability cannot be used to counteract recession phenomena, whereas tightening the monetary policy in order to defend price stability will lead to a decrease in output
The Main Library of the Cracow University of Economics
The Library of Warsaw School of Economics
The Library of University of Economics in Katowice
The Main Library of Poznań University of Economics and Business
The Main Library of the Wroclaw University of Economics
  1. W. Buiter: The Right Exchange Rate and When to Enter the EMU - the Role of ERM II. Maszynopis, referat na konferencję Banku Austrii "Challenges for Central Banks in an Enlarged EMU", 20-21 lutego 2004.
  2. S. Collignon: Fiscal Policy and Democracy in Europe. Maszynopis, referat na konferencję Banku Austrii "A Constitutional Treaty for an Enlarged Europe: Institutional and Economic Implications for EMU", 6 września 2004.
  3. M. Friedman: The role of monetary policy. "American Economic Review" nr 58/1968, s. 1-17.
  4. M. Jurek: Zero jako granica polityki stóp procentowych banku centralnego. "Ekonomista" nr 1/2004.
  5. P. Krugman: Thinking about the liquidity trap, 1999 http: // html
  6. D. Laidler: The Demand for Money, Theories, Evidence, Problems. Harper Collins College Publishers 1993.
  7. MacMillan Dictionary of Modern Economics. The MacMillan Press Ltd, 1992.
  8. J. Smithin: Controversies in Monetary Economics; Ideas, Issues and Policy. Edward Elgar, 1994.
  9. D. Wilson; Japan"s Slowdown: Monetary versus Real Explanations. "Oxford Review of Economic Policy" nr 2/2000.
  10. A. Wojtyna: Skuteczność polityki pieniężnej w warunkach niskiej inflacji: problem zerowej granicy nominalnych stóp procentowych. "Bank i Kredyt" nr 7/2001.
  11. H. Visser: A Guide to International Monetary Economics. Edward Legar, 1995.
Cited by
Share on Facebook Share on Twitter Share on Google+ Share on Pinterest Share on LinkedIn Wyślij znajomemu