Limited access to the formal financial sector is a common feature of the economic environment in many emerging market and developing economies. In this paper, we examine how the level of financial inclusion affects welfare-maximising monetary policy. Our theoretical framework is based on Galí,...

Financial inclusion - access to financial services - is increasing worldwide, often with official support. This special feature discusses the implications for central banks. Greater financial inclusion changes the behaviour of firms and consumers in ways that could influence the effectiveness of...