State monetary policy presentation. Money. State monetary policy. Monetary policy is

Monetary policy: main directions, tools, problems Author E.I. Serpova, teacher of economic disciplines, Rudny College of Information Technologies

Monetary policy (monetary policy) is the state policy of regulating the national monetary system.

Objects of regulation - supply and demand in the money market Subjects of regulation - banks and other financial institutions participating in the operation of the financial system The conductor of monetary policy - the central bank or “bank of banks”

The essence of monetary policy Monetary policy is a set of government measures to regulate the money market and monetary system in order to ensure stabilization of the economy

Justification of the need for monetary policy in economic theory; macroeconomic instability of a market economy; problem of increasing the efficiency and competitiveness of the national economy; problem of asymmetric information; problem of competition and monopoly

General goals of monetary policy increasing the efficiency and competitiveness of the national economy increasing the level of well-being

Special goals of monetary policy Financial stabilization of the economy Maintaining stable growth rates of the money supply Regulating the refinancing rate and the required reserve ratio Regulating the national currency exchange rate

Special goals of monetary policy Reducing inflation Development of the monetary system, formation of new financial institutions Deregulation of the monetary system Control over the activities of banks and other financial institutions

Directions of monetary policy (general characteristics of monetary policy) Stabilization: stimulating, contracting Anti-inflationary policy Foreign exchange policy

General characteristics of PrEP methods Administrative and legal Economic Direct Indirect General Selective

Monetary policy methods Changing the required reserve rate Changing the discount interest rate (refinancing rate) Open market operations Targeting Lending limits Control for certain types of loans

Monetary policy methods State loan benefits Banking legislation Legislation regulating the activities of other financial institutions Currency legislation

Expansionary monetary policy implemented by the government during a period of economic recession and high unemployment aimed at stimulating aggregate demand, GDP and increasing employment through monetary instruments

Monetary policy contractionary policy pursued by the government during a period of economic expansion and high inflation aimed at restraining the growth of aggregate demand and reducing inflation using monetary instruments

The monetary mechanism is the economic mechanism of the Central Bank's influence on aggregate demand and gross product by changing the supply of money supply.

Monetary policy and the effect of net exports is that when stimulating monetary policy is carried out, GDP growth occurs to a greater extent due to an increase in net exports and an increase in the level of aggregate demand

Problems of implementing monetary policy The problem of the liquid trap The effect of braking stabilization policy 3. Changes in the speed of turnover of the money supply 4. Investment effect The effect of interest income The problem of inflation

Used literature O. Melnikov, Fundamentals of Finance. - A-you, 2005. - 448 p. Sakhariev S.S., Finance. - A-you: “Legal Literature”, 2004. – 542 p.

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Even love has not driven as many people crazy as philosophizing about the essence of money. Gladson - Prime Minister of Great Britain Money will not feed you, clothe you, shelter you or entertain you until you spend it or invest it. People will do almost anything for money, and money will do almost anything for people. Money is a fascinating, repetitive, mask-changing mystery. Inscription on the Federal Reserve Bank of Philadelphia (1957)

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Money, banks and monetary policy Money and the money market Demand for money and equilibrium in the money market. Banking system and money supply. Money-credit policy. Monetary policy instruments. What is money? The history of the origin of money - consider for yourself.

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Money is a special commodity that serves as the only universal equivalent that expresses the value of all goods and is an intermediary in their exchange. Consider in detail on your own the Functions of money: Measure of value Means of circulation Means of accumulation Means of payment World money

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Law of money circulation Fisher's theorem MV=PQ, hence M= PQ/ V, where M – mass of money P – sum of commodity prices Q – quantity of goods V – velocity of circulation CD=Ʃ TC – KR + P – VP/ CO, where Ʃ TC – sum of commodity prices KR – credit P – payments by terms VP – mutual payments CO – circulation speed

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Monetary aggregate is an indicator of the amount of money or financial assets classified as money supply; their liquidity is close to unity). They are distinguished: 1. M0 - cash 2. M1 - M0 plus funds in settlement, current and special accounts of enterprises and organizations 3. M2-M1 plus time deposits of the population in Sberbank 4. M3-M2 plus certificates and government bonds They differ from each other in terms of the composition of the money supply and liquidity. Liquidity decreases from M0 M1 M2 M3.

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The money market is a market in which the demand for money and its supply determine the level of interest rates, the “price” of money: it is a network of institutions that ensure the interaction of demand and supply of money. In the money market, money is “not sold” and “not bought” - this is the specificity of the money market. They are exchanged for other liquid assets at opportunity cost, measured in units of the nominal interest rate.

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Money market Since the supply of money is not determined by its price, but is regulated by the state, it is completely inelastic. In reality, the supply of money depends on the goals of monetary policy: Fixed interest rate (MS2). Constant level of number of prices (MS1). Change points 1 and 2 (MS3). s D surplus % supply shortage supply Q MS1 MS3 MS2

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Details Banking system Central Bank - (state) Bank of Issue - has a monopoly right to issue money Commercial banks - collect money from depositors at interest and issue loans to clients at interest. The difference between % is bank profit Non-banking sector - bank-like organizations _ pension fund, insurance companies BANKING SYSTEM Bank - specialized financial institution Level 1 Level 2

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One of the main functions of a bank is to provide credit. A loan is a transaction between economic agents to lend money or goods at interest. Basic principles of lending: 1 – repayment (it is necessary to return what you took, but with %); 2 - urgency (return of money within a specified period); 3 – security (the loan is issued against material security); 4 – payment (payment of % for using the loan).

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FORMS OF CREDIT: Commercial Banking Consumer Mortgage State International Lombard

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Monetary (monetary) policy Macroeconomics grade 11

Final certification work of a student of group E-1/07 of the specialty “Economics” Gruzdova T.V.

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Goal of the work:

Creation of an educational and methodological complex on the topic “Monetary Policy” for classes with in-depth study of economics

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Training and metodology complex

intended for economics teachers; is built in accordance with the program of the Faculty of Pre-University Training of the State University-Higher School of Economics; focuses on the use of textbooks for schools with in-depth study of economics.

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Extract from the State University-Higher School of Economics program for students of preparatory courses and basic schools

Monetary (monetary policy) Monetary policy, its goals and targets. The role of the central bank. Monetary policy instruments. Open market operations with government securities. Changes in the norm of required bank reserves. Change in the refinancing rate (discount interest rate). The Central Bank as a creditor to commercial banks. Money market. Supply and demand for money. Expansionary and contractionary monetary policy. The impact of monetary policy on aggregate demand.

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Objectives of studying the topic:

deepening knowledge about the mechanism of interaction between commercial and Central banks; formation of ideas about monetary policy, goals and methods of its implementation; acquiring knowledge about the purposes and methods of regulating the money market using the banking system.

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As a result of studying the topic, students should

know and describe the concepts: “monetary policy”, “required reserve ratio”, “refinancing rate”, “open market operations”; understand and explain how the Central Bank’s policies affect the macroeconomic situation; distinguish between expansionary and contractionary monetary policies; name the possible consequences of certain measures of the Central Bank; apply the acquired knowledge to analyze a specific economic situation

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MONETARY POLICY - measures taken by the government of a country, the state that determine the amount of money supply, the amount of money in the country, lending interest rates, the volume of loans ... (economic dictionary) Monetary policy is a tool with which governments try to influence macroeconomic conditions by increasing or reducing the money supply. (dictionary of economics and finance)

What is monetary policy?

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Monetary policy is...

Monetary policy is determined and implemented by the Central Bank

measures to regulate the money market in order to stabilize the economy.

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Using these tools, the Central Bank can influence the money supply

Monetary policy instruments:

Changes in the required reserve ratio Changes in the discount interest rate (refinancing rate) Open market operations

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1. Change in the norm of required reserves:

An increase in the required reserve ratio leads to a decrease in the banking multiplier: the money supply decreases

A decrease in the required reserve ratio leads to an increase in the bank multiplier: the money supply increases

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2. Change in discount rate

An increase in the discount rate leads to a decrease in excess reserves of commercial banks. II A decrease in the lending capacity of banks leads to a multiplicative contraction of the money supply

A decrease in the discount rate leads to an increase in excess reserves of commercial banks. II An increase in the lending capabilities of banks leads to a multiplicative expansion of the money supply

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3. Open market operations are...

purchase and sale of government securities on secondary securities markets.

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Open market operations:

Sale of government securities by the Central Bank reduces the money supply

Purchase of government securities by the Central Bank to increase the money supply

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Where to invest money?

Cash; Demand deposits

Time deposits Securities (stocks, bonds)

High liquidity, but low profitability

High yield but low liquidity

What determines the decision of the owners of money?

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The interest rate is

The price of money, which depends on the supply and demand of money in the money market

The decision of money owners depends on the value of the market interest rate

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What happens in the money market under the influence of monetary policy?

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This policy of the Central Bank is usually called contractionary

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Goal of the work:

Creation of an educational and methodological complex on the topic “Monetary Policy” for classes with in-depth study of economics

Slide 3

Training and metodology complex

intended for economics teachers; is built in accordance with the program of the Faculty of Pre-University Training of the State University-Higher School of Economics; focuses on the use of textbooks for schools with in-depth study of economics.

Slide 4

Extract from the State University-Higher School of Economics program for students of preparatory courses and basic schools

Monetary (monetary policy) Monetary policy, its goals and targets. The role of the central bank. Monetary policy instruments. Open market operations with government securities. Changes in the norm of required bank reserves. Change in the refinancing rate (discount interest rate). The Central Bank as a creditor to commercial banks. Money market. Supply and demand for money. Expansionary and contractionary monetary policy. The impact of monetary policy on aggregate demand.

Slide 5

Objectives of studying the topic:

deepening knowledge about the mechanism of interaction between commercial and Central banks; formation of ideas about monetary policy, goals and methods of its implementation; acquiring knowledge about the purposes and methods of regulating the money market using the banking system.

Slide 6

As a result of studying the topic, students should

know and describe the concepts: “monetary policy”, “required reserve ratio”, “refinancing rate”, “open market operations”; understand and explain how the Central Bank’s policies affect the macroeconomic situation; distinguish between expansionary and contractionary monetary policies; name the possible consequences of certain measures of the Central Bank; apply the acquired knowledge to analyze a specific economic situation

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What is monetary policy?

MONETARY POLICY - measures taken by the government of a country, the state that determine the amount of money supply, the amount of money in the country, lending interest rates, the volume of loans ... (economic dictionary) Monetary policy is a tool with which governments try to influence macroeconomic conditions by increasing or reducing the money supply. (dictionary of economics and finance)

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Monetary policy is...

Monetary policy is determined and implemented by the Central Bank, measures to regulate the money market in order to stabilize the economy.

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Monetary policy instruments:

Using these instruments, the Central Bank can influence the money supply Changing the required reserve ratio Changing the discount rate of interest (refinancing rate) Open market operations

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1. Change in the norm of required reserves:

An increase in the required reserve ratio leads to a decrease in the bank multiplier: the money supply decreases A decrease in the required reserve ratio leads to an increase in the bank multiplier: the money supply increases

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2. Change in discount rate

An increase in the discount rate leads to a decrease in excess reserves of commercial banks. II A decrease in the lending capabilities of banks leads to a multiplicative contraction of the money supply. A decrease in the discount interest rate leads to an increase in excess reserves of commercial banks. II An increase in the lending capabilities of banks leads to a multiplicative expansion of the money supply

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3. Open market operations are...

purchase and sale of government securities on secondary securities markets.

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Open market operations:

The sale of government securities by the Central Bank leads to a decrease in the supply of money. The purchase of government securities by the Central Bank leads to an increase in the supply of money.

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Where to invest money?

Cash; Demand deposits Time deposits Securities (stocks, bonds) High liquidity, but low profitability High profitability, but low liquidity What determines the decision of money owners?

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The interest rate is

The price of money, which depends on the supply and demand of money in the money market. The decision of money owners depends on the value of the market interest rate

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What happens in the money market under the influence of monetary policy?