Central Banking and Monetary Policy in the Asia-Pacific

Central Banking and Monetary Policy in the Asia-Pacific

Akhand Akhtar Hossain

This timely book reviews the modern literature on inflation and monetary policy, and highlights contemporary issues in the design and conduct of monetary policy for price stability in developing Asia.

Preface

Akhand Akhtar Hossain

Subjects: asian studies, asian economics, economics and finance, asian economics, money and banking

Extract

This book is about central banking and monetary policy in the Asia-Pacific. The purpose of this book is as a reference text. It surveys the major theories, models and approaches to inflation and monetary policy, with a focus on developing countries of the Asia-Pacific. The subject matter is topical, as it highlights contemporary issues in the design and conduct of monetary policy for price stability. High interest rates, inflation, exchange rate volatility and large-scale capital flows since the early 1970s have indeed raised the importance of monetary, fiscal and exchange rate policies in developing countries. Most Asian developing countries have maintained high economic growth since the 1980s without experiencing serious policy-induced macroeconomic problems, such as inflation and large current account deficits. The 1997–98 currency crises in East and Southeast Asia did, however, expose the vulnerability of these economies to both domestic and external shocks. Since then, most countries of this region have undertaken both stabilisation and structural reform measures. As part of improving economic policy, they have given more importance to monetary and exchange rate policies for price stability with the goal of maintaining sustained economic growth without creating unsustainable macroeconomic imbalances. Recognising these macroeconomic developments, this book provides an overview of key concepts and principles of central banking and monetary policy and reviews contemporary issues in monetary policy in the Asia-Pacific. The ongoing global financial crisis that has originated from the US subprime mortgage crisis has raised a wide range of issues about the role and effectiveness of...