№ 1/2024

№ 1/2024

Nauk. pr. NDFI 2024 (1): 50–66https://doi.org/10.33763/npndfi2024.01.050

MONETARY POLICY

KHOKHYCH Dmytro ¹, KHMELOVSKYI Tymur ²

¹Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0003-3787-939X
²independent researcher
OrcID ID : https://orcid.org/0009-0009-4155-3924

Theoretical approaches to targeting macroeconomic indicators of monetary policy

The article examines theoretical approaches to the definition of the concept of "targeting" and its respective modes. According to Tinbergen, the components of the State's economic policy are a system of macroeconomic measures aimed at achieving social goals. To achieve them, a set of instruments is used, including fiscal and monetary policy measures. The purpose of the study is to outline the intermediate and ultimate goals of the central bank's monetary policy in terms of the modes of targeting macroeconomic indicators (money supply, exchange rate, nominal income, inflation) to achieve price and financial stability. Particular attention is paid to the classification of actual exchange rate regimes in IMF member countries and their shortcomings, the substantive characteristics of monetary targeting regimes and their use by central banks of different countries, and the advantages of inflation targeting over other monetary regimes. It is determined that a positive aspect of monetary targeting in Germany in the period 1975-1998 was the growing role of borrowed capital, which stimulated the growth of industrial production and provided an opportunity for lending to the growing economy. Today, it is known that the effectiveness of monetary aggregates targeting is inferior to that of inflation targeting. On average, the share of successful cases of achieving the target in countries that have been pursuing inflation targeting for more than ten years is 88%. Achieving the ultimate goals of monetary policy is an important condition for ensuring sustainable economic growth.

Keywords:targeting, exchange rate policy, monetary regimes, price stability, inflation, economic cycle, central bank

JEL: E31, E61

KHOKHYCH D. . Theoretical approaches to targeting macroeconomic indicators of monetary policy / D. . KHOKHYCH, T. Khmelovskyi // Наукові праці НДФІ. - 2024. - № 1. - C. 50-66.

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