Implications of Globalization for Monetary Policy

Author/Editor:

Helmut Wagner

Publication Date:

November 1, 2001

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper argues that the implications of globalization for monetary policy come mainly through two channels: On the one hand, the many structural changes that are associated with the globalization process cause an increase in the uncertainty surrounding monetary policy. This includes an increase in uncertainty about how to interpret macroeconomic data/indicators and about the monetary transmission mechanism. On the other hand, by strengthening the process of global economic integration, globalization increases international competition, thereby forcing market players to make structural adjustments or reforms that change the conditions or constraints under which monetary policy is implemented.

Series:

Working Paper No. 2001/184

Subject:

Asset prices Banking Central bank autonomy Central banks Globalization Inflation Output gap Prices Production

English

Publication Date:

November 1, 2001

ISBN/ISSN:

9781451859362/1018-5941

Stock No:

WPIEA1842001

Pages:

62

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