Monetary Policy in the 21st Century

Monetary policy is designed to support economic growth, inflation, and financial stability. The last decade has created significant challenges for the practice of monetary policy; from climate change, health risks, domestic and political uncertainty, monetary policy in the 21st century will have to navigate headwinds whilst creating employment and ensuring prices rise, albeit only gradually. This book is a collection of essays, which illustrates how central banks can target their tools to achieve dual objectives and positive spillovers to the housing markets, environment, and society. However, fiscal policy will play an indispensable role in economic growth going forward and deficit-financed spending should be designed in a manner that addresses climate vulnerabilities whilst upskilling the population. Meanwhile, the structural divergence between advanced and developing economies will generate spillovers and cross-asset contagion, as well as capitalized systems, grapple with deflation, while EMs and developing economies continue to grapple with commodity-linked economies and currencies. This book outlines actionable solutions in the design and implementation of monetary policy.