Monetary policy, the cash rate, tools and transmission channels

What this note covers

1. Objectives, stance and evidence
2. Ample reserves and operating rates
3. Interest-rate and cash-flow channels
4. Exchange-rate, asset-price and expectations channels
5. Lags, asymmetry and limitations
6. Assess policy with current official evidence

6 sections · 10 key terms & formulas · 6 common mistakes