Central banks are uniquely positioned to provide the core of the future monetary system. It is fueling the fundamental dissonance. The Justice Department announced today the seizure of nearly $9 million worth of Tether, a cryptocurrency pegged to the U. Such institutions include the mint, the central bank, treasury, and other financial institutions. Effective monetary sovereignty fits the existing hybrid monetary system, in which central banks issue public money as a low-risk instrument, while more risky lending is left to private institutions. Outline of Monetary Policy. The system was designed to establish economic stability for the nations emerging from the ravages of the war, as well as promote trade by increasing the. banking institutions. Contractionary monetary policy: This type of policy is used to decrease the amount of money. An international monetary system is a set of internationally agreed rules, conventions and supporting institutions that facilitate international trade, cross border investment and. As such, it establishes the basis for the discussion of monetary policy, banking supervision, and financial stability in the following chapters. Globalizing Capital is a good introduction to the international monetary system, and a decent review for the already familiar who want to revise their knowledge. The most common type of monetary system is Fiat money. Bank Capital, Leverage, and the Financial Crisis of 2008-2009 i. , Taylor 2013, 2014, 2015, 2016a, 2016b, 2017). It is through the monetary policy, RBI controls inflation in the country. Editorial deadline: 12 January 2023. But one school of economic thought, called monetarism, maintains that the money supply (the total amount of money in an economy) is the chief determinant of current dollar GDP in the short run and the price level over longer periods. What does monetary system mean? Information and translations of monetary. The IMF is governed by and accountable to its. Learn about the three types of monetary system: commodity money, commodity-based money and fiat money. The term ‘monetary system’ is conspicuously undefined in sociological usage. American economist Milton Friedman is generally regarded as monetarism’s leading exponent. Roman rule did bring certain immediate changes to the Egyptian economy, however. THE ROMAN MONETARY SYSTEM The Roman monetary system was highly complex. Bretton Woods: Not Sound There is no accepted theory of managing money in a fiat money world. Silver Standard: A monetary system in which a country's government allows its currency to be freely converted into fixed amounts of silver, and vice versa. v. Central banks in many advanced economies set explicit inflation targets. 1 – Banks as Financial Intermediaries Banks act as financial intermediaries because they stand between savers and borrowers. February 9, 2022. C. For more videos: supply refers to the cash and cash equivalents in a country at a given point in time. Figure 1. Let’s take a look at the last century of the international monetary system evolution. In this article, the various types of monetary systems are discussed along with important terms related to money which holds relevance for the IAS Exam. The monetary device used by the Nazis to deal with the unemploy-ment crisis, the famous "work creation bill," was a sort of financial practical joke played on the German credit system. It does this to influence production, prices, demand, and employment. BRETTONWOODS SYSTEM . 32), In the 19th century, Britain was the leader of the world economic system. balance of payments has been in continuous large deficit; and the stability of the convertible gold-dollar and sterling system has been increasingly questioned. ppt - Download as a PDF or view online for freeThe Present Fiat Monetary System Is Breaking Down. A well-functioning international monetary system is a public good that is essential for economic and financial stability. indeed, for the international monetary. The lack of any kind of rules‐ based monetary system to uphold the legitimacy of global free trade is provoking economic tensions among powerful nations. The Bretton Woods system was the first example of a fully negotiated monetary order intended to govern. 26. Their plan was endorsed at the Bretton Woods Conference in 1944 by 42 countries. The European Monetary System (EMS) is the result of an agreement signed in 1979 by which most European Economic Community member countries agreed to coordinate their monetary policies so as to avoid large fluctuations in the exchange rate among them. . An exchange rate is the. . Barter 1:20What is money? 2:26Functions of money 3:27Commodity money vs fiat money 7:22Money in the US economy 10:25M1 and M2 12:50The Federal Reserve System. In 2012, we see a fall in M4 lending and M4 liabilities. The IMS has helped support unprecedented economic growth and trade expansion over the past few decades. Gradually more countries adopted gold, usually in the form of coins or bullion, and this international monetary system became known as the gold standard. Contrary to the decentralisation. Submit Search. "A Closer Look at Open Market Operations. The first modern international monetary system was the gold standard. This interplay has been a story of one side pulling the other, leading to dramatic leaps in economic activity over time. Example II. The book begins in the mid nineteenth century, and examines the problems of bi-metalism (the linking of the value of silver with gold) and the linkage with metal and paper money. M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits. And this sort of transition. In the current monetary system, (central) banks act as trusted third parties that affirm that the sender of the money owns a greater or equal stock of money, that the money is transferred from the. promote general economic development C. Louis. This page titled 27: The Monetary System is shared under a not declared license and was authored, remixed, and/or curated by Boundless. Fast Money: The Egyptian Economy, Monetary System, and Horrendous Taxes. Bureau of Engraving and Printing creates. Interest Rates A monetary authority may set targets for foundational interest rates that are intended to influence all interest rates. monetary system might function based on a new international currency. There are. makes use of government spending, and taxes). The study approaches the international monetary system as a world-spanning payments system in which daily money flows are settled mainly through interactions of private financial institutions. Paper money. This pool,. It gained prominence in the 1970s, but was mostly abandoned as a practical guidance to monetary policy during the following decade because the strategy was found to not work very well in practice. Monetarism is a set of views based on the belief that the total amount of money in an economy is the primary determinant of economic growth. As analyzed by Kindleberger(1976): In the 19th century, Britain was the leader of the world economic system. Open Market Operations. The exchange rate between the weights of gold and silver was 1 to 13. Reflecting the perception at the time that the Depression-era “competitive devaluations. In a Sovereign Money system, only the central bank, owned by the state, may create money. This report describes how such a Sovereign Money system could be implemented and what steps would be required for a successful transition. It lowers the value of the currency, thereby decreasing the exchange rate. The budget system had three layers — central, regional, and municipal — but, like the Soviet state, it too was unitary. As analyzed by Kindleberger(1976): In the 19th century, Britain was the leader of the world economic system. The exchange rate between the weights of gold and silver was 1 to 13. Thus, increasing the money supply can stimulate the economy. “Monetary Policy and Central Banking. Fiat money is a type of currency that is not backed by a commodity, such as gold or silver. creation of a global currency remains illusory. At the many conferences on the global monetary order that I have attended, the message from Chinese scholars has long been clear: Their preferred method for improving the current system is to expand the role of special drawing rights,. That unique monetary system, along with such things as the absence of an income tax, a welfare state, and a warfare state, along with open immigration, contributed to the tremendous economic prosperity that pulled. S Monetary System. A new international monetary system was forged by delegates from forty-four nations in Bretton Woods, New Hampshire, in July 1944. Central banks in many advanced economies set explicit inflation targets. The Hellenistic system of landed soldiers was. International monetary system refers to the system and rules that govern the use and exchange of money around the world and between countries. During the 20th century, the international monetary system underwent major. Macroeconomics 100% (20) 27. money, and the rate of interest. In early 1973, the US dollar depreciated again and suffered a sell-off. Understanding how monetary policy works. So, higher interest rates through contractionary policy can be used to dampen inflation and move the economy back to the price stability component of the dual mandate. In both cases, global disruption shook the monetary system and caused prolonged instability. Competitive Money Supply: The International Monetary System in Perspective 11. Let’s take a look at the last century of the international monetary system evolution. S. Monetary Aggregates Explained. This section reviews U. U. Fiat money. The U. Expansionary monetary policy involves lowering interest rates to stimulate economic growth and increase the money supply. How the monetary system . Macroeconomics 100% (15) 8. THE MONETARY SYSTEM. Such a hybrid monetary system, if it functions well, combines the advantages of various public and private arrangements (Hockett and Omarova. The evolution of the international monetary system The gold standard Under the classical gold standard, from 1870 to 1914, the international monetary system was largely decentralized and market-based. The most commonly used tool of monetary policy in the U. A new more multipolar monetary system is instead likely to gradually emerge as a result of the increase in bilateral trade of many countries, the deepening of local capital markets in emerging countries and efforts to develop mutual insurance schemes against shocks resulting from shifts in US monetary policy. dollar. An early step. 00, and one cent is written as 1¢. The Relationship between M1 and M2 Money. Topic hierarchy. You are being redirected. International monetary system. the system of money used by a country or countries: European/global/international, etc. S. The Present Fiat Monetary System Is Breaking Down. Treasury bonds in order to influence the quantity of bank reserves and the level of interest rates. Boundless. A look at the history of the gold standard shows why it doesn’t work. Money Supply M3 and M4. A monetary system is a system by which a government provides money in a country's economy. S. What Is Monetary Policy? Monetary policy is an approach taken by a central bank or government authority that is intended to influence economic growth by expanding or constraining the supply of. The countries agreed to keep their currencies fixed (but adjustable in exceptional situations) to the dollar, and the dollar was fixed to gold. We need the rules of the world economy to be wired toward our climate goals. He’s considered the world’s foremost expert on global banking and world currencies, and he’s predicting a collapse of the international monetary system that will ultimately lead to the death. The international monetary system provides the institutional framework for determining the rules and procedures for international payments, determination of exchange rates, and movement of capital. The international monetary system will continue to rely on rules and conventions covering, for instance, monetary and exchange-rate arrangements; cross-border payments for capital-account transactions; and capital flows and related management measures. Its forerunners include the architects of the Chicago Plan in the 1930s (see Box 5. There are 13 modules in this course. The Berkeley View If the Harvard view is fundamentally empirical, then the Berkeley view is fundamentally historical. A burst of creative innovation is under way in money and payments, opening up vistas of a future digital monetary system that adapts continuously to serve the public interest. M1 and M2 money have several definitions, ranging from narrow to broad. government bonds by the Fed. Although they may seem far removed from modern life, their inventions in the monetary realm provided the basis for many economic practices still in use today. In the early 1970s, when the IMF system of adjustable pegs broke down, the currencies of the western European countries began to float, as did most other currencies. Listen to the Audio Mises Wire version of this article. en. S. The United States no longer issues bills in larger denominations, such as $500, $1,000, $5,000, and $10,000 bills. Fig. Private investors and speculators also have a major impact, sometimes to the disadvantage of specific countries. When the. Learn the ins and outs here. The Federal Reserve System (Fed) is the central bank of the United States. It takes time for our policy decisions to filter—or be transmitted—through the economy and financial system. The currency is freely convertible at home or abroad into a fixed amount of gold per unit of currency. Monetary Theory: A monetary theory is a set of ideas about how monetary policy should be conducted within an economy. A monetary system is a system by which a government provides money in a country’s economy. Alternatively, if inflation is a nonmonetary phenomenon, to control inflation, monetary policy must control slack in the utilization of resources. the system…. Each country has its own currency as money and the international monetary system governs the rules for valuing and exchanging these currencies. Usually, these include the national treasury, the central and commercial banks, and the mint. 1. THE ROMAN MONETARY SYSTEM The Roman monetary system was highly complex. Department of the Treasury to oversee the issuance of National Banknotes. 4. monetary system is a decimal system, with one dollar equal to one hundred cents. establish an international monetary system B. This i s a comprehensive study of the workings of the system in. Exchange Rate Mechanism - ERM: An exchange rate mechanism is based on the concept of fixed currency exchange rate margins. So I have for you today a story of remarkable technological innovation, some unfulfilled promises, and unintended consequences. The most commonly used tool of monetary policy in the U. It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being. currency and balances held in checking accounts and savings accounts are included in many measures of the money supply. Between 1863 and 1913, eight banking panics occurred in the money center of Manhattan. The framers of the. The bank will raise interest rates to make lending more expensive. P. The European Monetary System (EMS) was a multilateral adjustable exchange rate agreement in which most of the nations of the European Economic Community (EEC) linked their currencies to prevent large fluctuations in relative value. もっと見るThe International Monetary System then. As an economy gets closer to producing at full capacity, increasing demand will put. Many developing countries also are moving to inflation targeting. American money has depicted Liberty and Justice as allergorical figures. The Federal Reserve System is the central bank of the United States. Monetary policy, measures employed by governments to influence economic activity, specifically by manipulating the supplies of money and credit and by altering rates of interest. This pool, which is composed of final consumer goods, sustains individuals in the various stages of the production process. monetary system If we had no debts in our global monetary system, no money could. Disruptions to the financial and monetary system can stunt economic growth, reduce employment and strain government budgets. It performs five general functions to promote the effective operation of the U. 2018). The monetary system was reshaped in the mid- 1940s in the aftermath of the Second World War and again in the early 1970s after the first oil price shock. Describe the Bretton Woods Agreement and why it collapsed. The system will continue to rely on mechanisms allowing for effective and. 2. A low level of inflation is considered to be healthy for the economy. Until the nineteenth century, the major global economies. The Banks opened for business on November 16, 1914. What Is A Monetary System? Types. 2: Evaluating Fiscal Policy. Providing for the Optimum Quantity of Money 10. Money market fund shares act like bank deposits. Prior to World War I, capital flowed freely and the gold standard guaranteed stable exchange rates. 25, and that’s important to remember because many currencies use commas to separate cents from the main amount, but in the USA. xml ¢ ( Ìš]oÚ0 †ï'í?D¹ HÈW×M@/öqµ Jí~€— [b[±éÊ¿Ÿ“@—UPh õrƒpìsüX ç âÉÕ}]ywÔ¨Rð© cß#ž‹¢ä‹©ÿãöóèÒ÷”f¼`•à4õפü«ÙëW“Ûµ$å™h®¦þRkù> U¾¤š©@Hâ¦g. In implementing monetary policy, the Bank influences the formation of interest. See also how monetary policy works, how decisions. In open market operations (OMO), the Federal. Monetarism is a school of thought in monetary economics that emphasizes the role of policy-makers in controlling the amount of money in circulation. conditions and methods of functioning of money in the sphere of international r elations. They are an advanced representation of money for the digital economy. Ultimately, greater use of the Fund’s Special Drawing Rights would. It takes time for our policy decisions to filter—or be transmitted—through the economy and financial system. The Monetary System. monetary system - anything that is generally accepted as a standard of value and a measure of wealth in a particular country or region medium of. Our discussion is based throughout on a quantity theory of money. A monetary system based on central bank public goods, using a digital version of sovereign currency as its foundation, could foster innovation while safeguarding stability and security. C. Eventually, other countries, including Germany, France, and the United States, adopted the gold standard. There’s a real mismatch between where the financial system is going and where investment is needed to change our global energy systems. The financial crisis of 2007-2009 is a wakeup call. Open market operations take place when the central bank sells or buys U. We aren’t “capitalist” in terms of a monetary system. THE MONETARY SYSTEM. Monetary policies can target inflation levels. gold standard, monetary system in which the standard unit of currency is a fixed quantity of gold or is kept at the value of a fixed quantity of gold. Price stability is important because it provides the foundation for the nation's economic activity. The U. Essential reading for understanding the international economy―now thoroughly updated. Throughout history, developments in the monetary system and society at large have been closely interwoven. could evolve . U. The Bretton Woods system was the first example of a fully negotiated monetary order. Having central bank money as the settlement asset in the sameSince the return of convertibility among the currencies of most major industrial countries at the beginning of 1959, a crisis affecting at least one major currency has threatened each year; the U. supply and availability of money, the cost of. as coin, notes or electronic money. The public goods consisted of a market for. For the interpretation of relevant concepts of central bank digital currency, the most recognized definition is the currency issuance framework of "the money flower: a taxonomy of money " proposed by Bench and Garratt [], which defines its four major attributes:. Panel of experts. From the end of World War II to the early 1970s, the United States was part of the international monetary system known as the Bretton Woods system. Expansionary monetary policy increases the growth of the economy, while contractionary policy slows economic growth. Congress establishes a national banking system and authorizes the U. Money is a means of fulfilling these functions indirectly and in general rather than directly, as with barter . 🔥 FREE access to our exclusive Trader Masterclass: this second video from our series on monetary systems, we. Different measures of M3, M4 show strong growth (over 10%) until 2009, where growth rates fall. However, the broader financial architecture issues, includingIndeed, according to the World Bank: “… the most likely scenario for the international monetary system is a multicurrency system centered around the U. It is the opposite of contractionary monetary policy. Is a mean to preserve value and an unit of account e. Given the macroeconomic dangers of a malfunctioning banking system, Monetary Policy and Bank Regulation will discuss government policies for controlling the money supply and for keeping the banking system safe. Structural flaws make the crypto universe unsuitable as the basis for a monetary system: it lacks a stable nominal anchor, while limits to its scalability result in fragmentation. The Bretton Woods Agreements: A Monetary Theory Perspective PART. Accordingly, the efforts of the Committee and of its successor, the Interim Committee of the Board of Governors on the International Monetary System (Interim Committee), shifted toward developing a more flexible set of exchange arrangements and of principles that would guide members in the conduct of their exchange rate policies. AE As = Roman pound of bronze 12 uncia. Central bank digital currencies (CBDCs) offer in digital form the unique advantages of central bank money: settlement finality, liquidity and integrity. Bank Capital, Leverage, and the Financial Crisis of 2008-2009 i. But their policies. S. Money may take a physical form as in coins and notes, or may exist as a written or electronic account. The Headquarters of the Federal Reserve System in Washington, D. v. The IMF is governed by and. Section 2A of the Federal Reserve Act provides the Federal Re-serve’s so called “dual” mandate:6 The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary-describe the historical development of the modern global monetary system-explain the role played by the World Bank and the IMF in the international monetary system-compare and contrast the differences between a fixed and a floating exchange rate system-identify exchange rate regimes used in the world today and why countries adopt different. The international monetary system is the set of rules, institutions, and treaties defining the . It is a useful indicator of future economic performance because it is correlated with macroeconomic variables, such as inflation and interest rates. Monetary policy in the United States comprises the Federal Reserve's actions and communications to promote maximum employment, stable prices, and moderate long-term interest rates--the economic goals the Congress has instructed the Federal Reserve to pursue. central bank’s role at the core of the monetary system (Graph 6). Treasury bills. Private investors and speculators also have a major impact, sometimes to the disadvantage of specific countries. Contractionary monetary policy is a strategy used by a nation’s central bank during booming growth periods to slow down the economy and control rising inflation. The Federal Reserve System is the central bank of the United States. The Bretton Woods system lasted until 1971. House of Representatives. monetary system is, however, gradually becoming more multipolar. Bank capital is the resources a bank’s owners have put into the institution. It regards the dominance of the dollar for much of the last 75 years as a historical anomaly that is unlikely to persist. These seized funds were. THE MONETARY SYSTEM Money Market Funds A money market fund is a financial institution that obtains funds by selling shares and uses these funds to buy assets such as U. Federal Reserve History essay: Launch of the Bretton Woods System; St. international monetary system meaning: the system of rules that controls the exchange of currencies among countries, and that is designed…. It's also called a restrictive monetary policy because it restricts liquidity. Paperback. These new standardized bronze denominations are known as “Aes Grave” and begin to form a monetary system that to this day still influences modern society. Money multiplier is the amount of money the banking system generates with each dollar of reserves. iii. Among its many functions, the central bank issues the economy’s unit of account and ensures the finality of payments through settlement on its balance sheet. monetary system. The Monetary System - Download as a PDF or view online for free. is open market operations. BRETTONWOODS SYSTEM . The monetary aggregate refers to essential parameters in the money supply. This chapter explains the functioning of the monetary and financial system in the euro area. All are correct. International Monetary Systems: In the early 1940s, policymakers from the US and Britain began working on a new international monetary system. monetary system meaning: 1. 74 (USD . monetary system and “can better reconcile reasonably free and open markets with independent national policies [and] stability,” the sensible goal called for by Volcker (2014). It does so by supporting economic policies that promote financial stability and monetary cooperation, which are essential to increase productivity, job creation, and economic well-being. Important facts about the Monetary System in India. Chap_29, The Monetary System. The Relationship between M1 and M2 Money. dollar. The system operates within a legal framework to ensure the proper formulation and implementation of state monetary policies, establish and perfect a macro control system through the central bank. to coordinate exchange rate policies vis-à-vis the non-EMS currencies. The Bretton Woods sys- tem was the world’s most recent experiment with a fixed exchange rate re- gime. wikipedia. Monetary policy affects how much prices are rising – called the rate of inflation. Their system relied on four major. Instead. One dollar is written as $1 or $1. The climate crisis is fundamentally a global problem. Expansionary monetary policy is when a central bank uses its tools to stimulate the economy. ii. A medium of exchange is anything that is widely accepted as a means of payment. monetarism, school of economic thought that maintains that the money supply (the total amount of money in an economy, in the form of coin, currency, and bank deposits) is the chief determinant on the demand side of short-run economic activity. The system of currency convertibility that emerged from Bretton. M1 = coins and currency in circulation + checkable (demand) deposit + traveler’s checks. In other words, in such a monetary system, gold backs the value of money. Following the war, however, chaos emerged and led to a period of extensive capital controls that lasted until the beginning. Since its launch in 1944, the USD-centric monetary system has undergone radical change, typically in response to "systemic" crises such as major shifts in US monetary policy that generated stresses outside the United States. In a banking system with ample reserves, the tools of traditional monetary policy, such as open market operations, have limited effectiveness in influencing interest rates. 3. Learn about the objective of Canada’s monetary policy and the main instruments used to implement it: the inflation-control target and the flexible exchange rate. Resilient USD-centric. S. After the agreement was signed, America was the only country with the ability to print dollars. The IMF will turn 75 this year. M1 = coins and currency in circulation + checkable (demand) deposit + traveler’s checks. Expansionary monetary policy is one wherein the central bank lowers interest rates to promote credit availability in an economy. The Bretton Woods Conference, officially known as the United Nations Monetary and Financial Conference, was a gathering of delegates from 44 nations that met from July 1 to 22, 1944 in Bretton Woods, New Hampshire, to agree upon a series of new rules for the post-WWII international monetary system. Unlike forms of money to be developed later, commodity money has a. The second looks at the background of the debates and the design of the Bretton Woods system. They currently exist in a small and experimental corner of the world’s financial markets, and are. Reserve. , U. Monetary policy, measures employed by governments to influence economic activity, specifically by manipulating the supplies of money and credit and by. The monetary system is a form of money circulation that has gone through a long path of origin and development, and its mechanisms and tools are different depending on the different levels of economic development of countries. The monetary system that the Framers established with the Constitution was the most unusual and the most radical in history. International Monetary System (IMS) refers to the arrangements and rules governing exchanges and payments through international currencies that are accepted by countries within international economic activities. In a banking system with limited reserves, changes in the money supply have a significant impact on interest rates and the overall economy. Under the silver standard, an exchange. 27. The third analyses the tensions that the Bretton Woods monetary system faced since the 1960s until its collapse in the early 1970s. S. Sterling was international money. They issue central bank money, which. Over the past few years I have been making the case for moving toward a more rules‐ based international monetary system (e. This paper analyzes the historical evolution of the international monetary system in the context of the rising role of developing countries in the world economy and the emerging multi-polar growth setting. International monetary system refers to the system and rules that govern the use and exchange of money around the world and between countries. S. The New Monetary Economics and Keynes’ Theory of Money PART III: MONETARY SYSTEMS 8. Fiat money is currency that a government has declared to be legal tender , but it is not backed by a physical commodity. 1: Introducing Money. Treasury bonds in order to influence the quantity of bank reserves and the level of interest rates. The EMS aimed to create a stable exchange rate for easier trade and cooperation among European countries through. But, it is the money held in hand, bank accounts, investments, and other assets. Such a hybrid monetary system, if it functions well, combines the advantages of various public and private arrangements (Hockett and Omarova. Once dismissed as a fringe interest of tech evangelists, cryptocurrencies—particularly Bitcoin—have skyrocketed to mainstream popularity and trillion dollar valuations. b. M2 = M1 + savings deposits + money market funds + certificates of deposit + other time deposits. But they are still legal tender and may still be in circulation. Monetarism Explained. The two major accomplishments of the. g. By the early 1960s, the economist Robert Triffin had identified a major weakness in this system: the country that issued the global reserve currency (in this case, the United States) had to. This feature traces the history of the international monetary system from the rise of the gold standard to the present. Monetary Reform: A Plan to solve Our Financial Crisis. monetary system might function based on a new international currency. 1 The era of bimetallism There are 3 types of monetary system: Commodity money. The three objectives of monetary policy are controlling. The study approaches the international monetary system as a world-spanning payments system in which daily money flows are settled mainly through interactions of private financial institutions. International Monetary System (IMS) is a well-designed system that regulates the valuations and exchange of money across countries. This column analyses the IMF’s global reserve system, identifying three issues and suggesting two alternatives. As the currency used in India is made of paper, it follows Paper Currency. First, there is a reason why China has not done more to elevate the renminbi as an international currency. 2 II. The purpose is to provide some initial thoughts for further research on the three key questions mentioned above without providing a definitive policy proposal at this stage. How the monetary system . Outline of Monetary Policy.