CENTRAL BANKING BY COMMITTEE:

Society invests considerable resources into the science and technology of weather services. In order to effectively assess the market for weather services, and thus properly scale the level of resources that, for example, the U.S. Congress or a company ought to devote to serving this market, decision makers need information on the costs and benefits associated with alternative courses of action. To date such information has not been readily or systematically available, leaving unanswered questions about the effectiveness of investment in the science and technology of weather. We argue herein that the allocation of resources to weather in the public and private sectors is unlikely to become more effective or—of particular concern to the weather community—grow significantly unless the weather community takes an integrated perspective on weather impacts, forecasts, and policy that provides decision makers with reliable information on the costs and benefits of alternative courses of action. This paper suggests one such integrated perspective that might guide the provision of such information to decision makers. Two recommendations follow straightforwardly from the perspective offered herein:

ACCORDING to classical economic theory, when a businessman makes a decision about the future progress of his firm, there are at least three elements in the making of a rationalchoice. He is faced with a given set of alternative courses of action. Each of these has a set of consequences. He has a system of preferences by which to rank and to choose one of them by joint consideration of the course of action and its consequences in terms of business profit. In a recent article' it has been suggested that these three elements are frequently not met with in practice. The alternatives are not in any sense given, and, indeed, the search for them is a part of the process of the business decision. Similarly the consequences are not given and part of making a rational choice consists in deciding to find out as much as possible about the consequences of each alternative course of action. The comparisons are not made only on the basis of profit, but in terms of intangible consequences, too. This makes the determination of a single 'best' alternative well nigh impossible, and what is sought instead is a satisfactory solution in that it satisfies a goal and even some subsidiary goals. Even the problem itself, about which a decision is to be made, is not part of 'the given', and the search for problems of varying difficulty was thought by the authors to be an organizational task. A firm is presented with these problems by the possibility of introducing 'automation', that is, automatic handling and making or processing things, including clerical information, automatically. Automation is often said to be a method of carrying out new company tasks, or of doing the old tasks more rapidly, and a way of saving labour and sometimes other costs. 2 The aim of this paper is to attempt to shed light on managerial decisions to introduce innovations by reconstructing some aspects of such a major decision made by a company. The decision was to adopt automation for some of its clerical operations.

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The paper's starting point is finding an answer to the question: What kind of monetary policy should be followed by the Central bank in new market circumstances? As a major monetary institution, the Central bank should provide credibility for its monetary policy, which is particularly important during a macroeconomic stabilisation. In order to choose the most appropriate monetary policy, its creators should be familiar with the monetary policy's effects on economic activities, first of all on investment activities and the period in which they may occur. The Central bank uses its special status and authorisations to control monetary trends, to keep and handle foreign exchange reserves, to keep banks' required reserves, to manage the country's debt, to be the final creditor of the banking system, to take care of the banking system's liquidity. That is why the Central bank has become important for the functioning of the whole financial market, and especially the monetary market. The Central bank has both direct and indirect influence on the most important events on financial markets, financial system, as well as a wider influence - on a country's whole economy. In order to envisage the financial market's impact on monetary and investment policies, one should begin with the Central bank's role on the financial market, and at the same time analyse the financial market's instruments and institutions.

Monetary policy measures in reaction to the Global Financial Crisis and the COVID-19 pandemic have resulted in unprecedented (re)distributional effects. In addition, Central Bank (CB) interventions have been conceptualized as targeted measures favouring certain market participants compared to others. Against this background, discussions about CBs and inequality have sparked in the economic and legal literature. The article takes up this discourse and sheds light on the different aspects of equality within monetary policy: equality as an objective of monetary policy, equality and inequality considerations with regard to the design of monetary policy measures, and equality and inequality as side effects of monetary policy and the interaction between inequality and the monetary policy transmission. The aim is to provide a structural analysis of how the notion of equality is embedded in the mandate of the ECB and how it translates into legal requirements with regard to the implementation of monetary policy measures. Central Banks, inequality, ECB, monetary policy, global financial crisis, COVID-19

The recent debate about asset price bubbles and monetary policy in view of "leaning against the wind" is controversial in economic literature. In this paper we argue that depending on the circumstances there is space for the central bank to lean against financial imbalances. With an optimal bounded control problem in continuous time we have developed an augmented nonlinear Taylor Rule. The main advantage of our formulation is its much greater analytical tractability, which produces distinct results. Even under the assumption of nonlinearities the central bank is in a position to move the interest rate above a threshold value to provide financial stability.

INTERRELATIONSHIP OF INFLATION, EXCHANGE RATE AND INTEREST RATES IN THE CONTEXT OF HUNGARY'S STRATEGIC POLICY

The article analyzes the effectiveness of the NBU's monetary policy. During the period of independence, the National Bank never performed any of the functions stipulated by law. The main instruments of monetary and credit policy at the disposal of the central bank are not used as intended, and therefore do not ensure the performance of the functions entrusted to the National Bank of Ukraine, in particular: they do not ensure the stability of the hryvnia exchange rate, price stability, accelerated socio-economic development of the state and the adopted inflation level. The monetary and credit policy of the National Bank must be radically changed to ensure the implementation provisions of Art. 6 of the Law of Ukraine ‘On the National Bank of Ukraine'. The central bank's efforts must be coordinated with the government's efforts, and the central bank's monetary policy must be coordinated with the government's fiscal policy. In the paper, we propose to change the monetary policy instruments of the NBU in order to direct it to the support of the real sector of the economy and the stability of the exchange rate. The proposed changes provide for the establishment of refinancing rates up to 2%, placement of deposit certificates -2% (minus 2%). At the same time, it is necessary to make changes to the Tax Code of Ukraine regarding the introduction of progressive floating rates of taxation of the profit of financial institutions, limitation of the right to deduct losses from the tax base of financial institutions in certain cases. . . For the actual production of goods with a high added value, provide the reduction of the tax base for the part invested in production, and set the tax rate for the distributed part of the profit at the level of the personal income tax rate. Non- traditional methods of stimulating development are also proposed, in particular the purchase of government securities. The marginal value of government debt securities should be limited to 2-3% of GDP.

Interaction between monetary and macroprudential policies

Two types of currency in circulation models are identified: (1) a first generation derived from the theory of money demand and (2) a second generation aimed at producing daily forecasts of currency in circulation. In this paper, we transform the currency demand function into a VAR to capture the dynamic link between interest rates and the demand for cash. We also apply ARIMA modeling to forecast the daily currency in circulation for Brazil, Kazakhstan, Morocco, New Zealand, and Sudan. Our empirical work shows that some of the conclusions in the economic literature on the impact of interest rates on the demand for currency do not necessarily hold, and that central banks would benefit from running both generations of currency in circulation models. The fundamental longer-run determinants of the demand for cash are distinct from its short-run determinants.

Central banks have been said to take partial responsibility for the global financial crisis. In a broader sense, central banks play a key role in shaping monetary and economic policies. After the global financial crisis, central banks are burdened with more tasks of ensuring economic growth, employment, and financial stability. This article takes a historical view towards the policy landscape and monetary instruments the People’s Bank of China, China’s central bank, has been working on to achieve various policy initiative. Although the general consensus is that China’s central bank may have more authority in policymaking, its multiple tasks, functions,and goals may constrain its capabilities and autonomy. China central bank’s ambition to internationalize Renminbi may further complicate its policy agenda and the way it deploys monetary instruments.

Behind productive and prosperous economies are independent central banks that implement effective monetary policies. This observation is especially valid for the G20, which comprises the world’s top twenty economies in terms of gross domestic product and the largest stakeholders of the global economic system. These economies include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom, the United States, and the European Union. Three features of this book, which focuses on central banking and monetary policy in the G20, an intergovernmental platform, stand out: Firstly, as contemporary theories and global practices confirm, the main purpose of central banks is to ensure monetary and price stability, not despite the government but in cooperation with it. This principle is strongly emphasized here. Governments, which must maintain fiscal discipline, are key to the success of central banks in combating inflation and deflation. Secondly, since the authors of the book chapters come from various countries and academic institutions, the book offers a range of perspectives and intellectual richness. Without deviating from the book's main axis, the authors examine the changing paradigms in central banking and the increasing challenges of monetary policy. This examination is based on developed and emerging economies, integrations, financial organizations, and economic crises within the G20, informed by significant sources. Thirdly, this book offers university researchers, professional business practitioners, and curious readers the opportunity to explore and reflect on new concepts such as green central banking, digital money, and interest-free monetary policies, which have gained prominence in the wake of the global COVID-19 pandemic, alongside mainstream topics. It is hoped that this book, consisting of 14 chapters, will inspire those who wish to conduct new and renewed academic studies on global central banks and monetary policies and will fill a gap in the literature.

In Search of Monetary Stability: The Evolution of Monetary Policy

Faced with COVID-19 crisis, central banks have once again become one of the key players in the economies. The aim of this article is to analyse the actions of Central and Eastern European central banks within all their roles (monetary policy, micro-and macroprudential policy, deposit guaranteeing and resolution) during the first coronavirus wave. The analysis shows that they were active in various fields, not only those that were traditionally always assigned to central banks (i.e. monetary policy, although this was the major field of activity). Scope of the intervention naturally depended on the shape of the national financial safety net. At the same time, the use of monetary policy tools depended on the adopted monetary policy strategy. Practice of central banks’ actions shows that central banks with a wide range of monetary tools reacted later. It seems that the scope and intensity of the use of monetary policy tools was not influenced by the general role of the central bank in the financial safety net. The monetary toolkit used by banks was based on a standard set of instruments with modified conditions of application (scale, transaction parameters and their type, collaterals and counterparties). Although transactions with specific parameters were sometimes implemented for the first time, they can still be included in the framework of classic monetary policy tools. In areas other than monetary policy, central banks were much less active. The most disturbing seems to be the passivity in the field of macroprudential policy.

Doves, Hawks and Pigeons: Behavioral Monetary Policy and Interest Rate Inertia