Macroeconomics, 2nd Edition by Pearson

MONETARY POLICY OBJECTIVES AND TARGETS

401

15.1

Goals of Monetary Policy and

Intermediate Targets

Apart from attempting to understand how the aggregate economy functions,

macroeconomics is also concerned with the goals that policymakers may

appropriately engage with. The goals of macroeconomic policymaking are usu-

ally the following:

1.

Output: Several theories point out that there is little scope for monetary

and fiscal policy to have long-run effects. However, in the short-run, unex-

pected changes in the growth rate of the money stock can have an effect on

real output. This makes one of the goals of macroeconomic policy, that ...