Monetary Policy

An introduction to the principles underlying modern central banking, peppered with historical anecdotes spanning the past hundred years. The objectives of monetary policy as well as the instruments used to achieve them are discussed in detail. Historical excursions include the German hyperinflation episode of 1923, the rise and fall of the Bretton Woods system, the oil embargoes of 1973 and 1979, Japan's Lost Decade, the Asian Financial Crisis, the Dotcom Bubble and the bankruptcy of Lehman Brothers. Modern innovations like inflation targeting, quantitative easing and the Taylor Rule are also discussed. The book is written without assuming any prerequisites, so it is suitable for undergraduate students of economics and motivated high school students as well as anyone with a general interest in economics.