Monetary Policy
3 articles
De-dollarization: Why Countries Want Off the Dollar and Why They Mostly Can't
De-dollarization, a decline in the U.S. dollar's global use, is driven by geopolitical sanctions and economic policy spillovers. However, powerful structural constraints like market liquidity and institutional inertia ensure the dollar's dominance remains entrenched, leading to gradual diversification rather than an imminent collapse.
Inflation Targeting vs. Exchange-Rate Pegs: How Emerging Markets Choose Between Two Imperfect Anchors
Emerging markets must choose between inflation targeting and exchange-rate pegs to control inflation, each with distinct risks and challenges stemming from weaker institutions and greater external shocks.
How Central Banks Utilize Quantitative Easing and Tightening as Tools for Monetary Policy
Central banks use quantitative easing (QE) and quantitative tightening (QT) as key monetary policy tools to influence long-term interest rates and economic activity, especially when conventional rate adjustments are insufficient. These policies involve large-scale asset purchases (QE) or sales (QT) impacting the central bank's balance sheet and financial system liquidity.