328 entries
Monetary policy
Central banking and money-supply mechanics — interest rates, QE, aggregates, reserve currencies.
- Taylor Rule Rate-Setting A policy formula linking the central bank's interest-rate target to the gaps between actual and target inflation and output.
- Temporary Open-Market Operations Temporary open-market operations are repurchase agreements in which a central bank buys securities and agrees to sell them back on a near-term date.
- Term Auction Facility A Federal Reserve program that auctioned fixed-term credit to banks during crises, bypassing stigma of the discount window.
- Term Premium The extra return that long-duration bonds offer compared to short-duration bonds, compensating investors for longer-term risk and uncertainty.
- Term Structure of Interest Rates The unified framework for why yields differ across maturities and what those differences signal about economic expectations and future rate paths.
- The Impossible Trinity in Exchange Rate Policy Impossible trinity exchange rate policy explained: why countries cannot fix exchange rates, allow capital flows, and control monetary policy simultaneously.
- The Money Multiplier: How Bank Lending Expands the Money Supply Explains how the money multiplier works: when banks lend out deposits, the initial injection of reserves can expand broad money by a multiple.
- The Repo Market's Link to the Money Supply How overnight repurchase agreements create short-term liquidity and why repo market disruption shrinks the effective money supply.
- The Taylor Rule: The Formula Behind Central Bank Rate Decisions The Taylor Rule is a monetary policy formula that calculates what a central bank's interest rate should be given inflation and output gaps. Learn how the equation guides rate decisions.
- The Zero Lower Bound Problem in Monetary Policy Why central banks hit a wall when interest rates near zero: conventional rate cuts stop working, and alternatives like quantitative easing become necessary.
- Threshold-Based Forward Guidance Explained How central banks use threshold-based forward guidance to tie policy commitments to economic thresholds like unemployment or inflation rather than calendar dates.
- Tiered Reserve Remuneration Paying differential interest rates on different tranches of bank reserves to limit the squeeze on bank profitability while preserving negative rate policy.
- Time Deposits vs Demand Deposits in Money Supply Measurement Why the Federal Reserve counts demand deposits in M1 but time deposits in M2: understanding liquidity tiers and how shifts between them change reported money supply.
- TONAR TONAR is the Tokyo Overnight Average Rate, a benchmark interest rate for overnight unsecured yen lending, replacing JPY LIBOR.
- Transmission Channels of Monetary Policy Transmission channels of monetary policy explained: interest rate, credit, exchange rate, asset price, and expectations channels.
- Transmission Protection Instrument The ECB's 2022 tool for containing unwarranted sovereign spread widening that disrupts monetary policy transmission across the eurozone.
- Unconventional Monetary Policy Unconventional monetary policy refers to central bank tools deployed when interest rates hit zero or near-zero, including quantitative easing, negative rates, and forward guidance.
- Vehicle Currency A third currency used as an intermediate medium in foreign exchange transactions where no direct liquid market exists between two currencies.
- Velocity of Money and Its Relationship to Inflation Velocity of money measures how quickly money circulates through the economy. Learn how velocity interacts with the money supply in the quantity theory equation MV=PQ and why falling velocity can offset inflation.
- What Happens When Reserve Requirements Are Abolished How eliminating reserve requirements changes bank lending, money creation, and the transmission of monetary policy.
- Which Money Supply Measure Best Predicts Inflation Which money supply measure predicts inflation: M1, M2, M3, and Divisia aggregates compared as leading indicators across economic cycles and crises.
- Why the Velocity of Money Has Been Declining Structural factors driving the long-term decline in money velocity across developed economies.
- Yield Curve Control A central bank policy that targets specific long-term government bond yields by committing to unlimited purchases at a specified rate.
- Yield Curve Control Explained How yield curve control works: central banks cap long-term bond yields through unlimited purchase commitments to manage inflation and economic growth.
- Yield Curve Control: How Central Banks Cap Long-Term Rates How central banks fix target yields on longer-maturity bonds, the mechanics that differ from standard open-market operations, and risks when the peg faces pressure.
- Yield Curve Control: How the Framework Works Yield curve control framework explained: how central banks pin target yields on specific maturities, differences from conventional rate-setting, and exit conditions.
- Yield Curve Shape The pattern formed by plotting interest rates across different bond maturities, which signals market expectations about economic growth and inflation.
- Zero Lower Bound The limit on how low nominal interest rates can go; when nominal rates hit zero, central banks must rely on unconventional policy tools.
Looking for something specific? Use the search box up top, or browse every category →