Monetary discipline

Monetary discipline is a phrase used by some economists when speaking of monetary policy, generally meaning limiting the money supply of an economy in some way.

Definitions

One definition of monetary discipline is a central bank matching the money supply to the level of production or reserves in an economy.[1] This definition holds that money printing should have a relationship to a particular economic equation, rather than being influenced by politics.[1]

Another definition is constraining the money supply, limiting inflation, and growing an economy by increasing the velocity of money.[2]

Another way of achieving monetary discipline is by keeping a pegged exchange rate, thereby matching a money supply to a foreign currency.[3]

References

  1. 1 2 "Ways of Controlling Inflation: Recommendations to Zimbabwean Policy Makers". March 7, 2011. Retrieved May 22, 2012.
  2. ↑ Succo, John (October 11, 2004). "Minyan Mailbag - Money Supply and Real Estate". Retrieved May 22, 2012.
  3. ↑ Fielding, David; Bleaney, Michael. "Monetary discipline and inflation in developing countries: the role of the exchange rate regime". Oxford Journal. Retrieved May 22, 2012.
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