Us vs. Eu Monetary Policy

Introduction Today I would like to briefly compargon pecuniary policy in the euro ara and in the US. Of course in that location are differences between the dickens areas, but there are also important similarities. This comparison can help us understand the reasons behind their differences and may provide some usable insights into the institutional implications for euro area monetary policy in the future. I will structure my remarks around three themes: the policy goals of the two monetary unions, their organization, and the monetary policy decision-making process in apiece system. Goals and philosophy Lets begin by comparison the goals or mandates of the Eurosystem and the Federal Reserve System. In Europe the first-string focus of monetary policy is to maintain price stability. In contrast, the Fed has multiple objectives for monetary policy. Their goals are to achieve ut some employment, stable prices and moderate long-term interest rates. An important interpretation for their different mandates can be found by looking at at their stinting histories. In Europe, monetary union is the most recent step in an ongoing process of governmental and economic integration.

The hyperinflation experienced in the first half of delay century in some European countries, in particular proposition in Germany, has played an important role in ensuring that European monetary policy is focussed on price stability. Their experiences in Europe contrasts with those in the US. A key US final result that commentators frequently refer to is the Great Depression. Monetary policy is much blamed for adding to the severity of the Great Depression in the US. That is a reason why employment and interest rate objectives endure in the Feds mandate, and why policy makers there react so quickly to signs of slowing economic growth. nether normal circumstances, policy makers on both sides of the Atlantic are likely to take similar decisions. However, around the time that the economic cycle is changing and growth is slowing... If you want to get a full essay, order it on our website: Ordercustompaper.com

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