Analysis of the Effectiveness of Monetary Policy Instruments

For several centuries, the debate on monetary policy based on price variables has been a major issue in the context of price stability at the internal level of the country in particular and macroeconomic stability in general. Monetary policy is seen as one of the main instruments of economic policy, the ultimate objective of which is price stability, maximum growth, full employment and balance of payments equilibrium. As such, the overriding objective assigned to any government within a given community is to ensure the social welfare of its population. And to achieve this objective, governments develop their economic policies, which are in fact a set of several policies including monetary, fiscal, agricultural, etc.. Once these are combined, a number of so-called ultimate objectives can be achieved, namely: economic growth, price stability, full employment and external balance, the achievement of which confers social well-being on its population.