The monetary transmission mechanism describes the channels through which changes in monetary policy affect the policy target, price inflation. Understanding the transmission mechanism is thus central to the successful conduct of monetary policy. This paper uses a Vector AutoRegressive (VAR)...

The paper presents a theoretical model of how banks and the non-bank private sector respond to changes in monetary policy. Unlike many textbook models in which banks play no active role, the banking sector is recognised here as playing a key part in transmitting changes in monetary policy to the...

This paper discusses some of the operational issues relevant to the implementation of an inflation-targeting regime. In particular it focuses on: whether inflation targeting is 'new'; whether (and how) the forward-looking nature of inflation-targeting helps to prevent instabilities in inflation;...

A new CEP report says that the financial system has become far more complicated than it need to be - and dangerously unstable too

In July 1999, the CEP held a second meeting of policymakers and thinkers to examine in greater detail aspects of the international financial architecture and proposals for its reform. This Special Report includes revised versions of the main papers presented, including those from Peter Kenen,...