This open access book gives a concise introduction to the practical
implementation of monetary policy by modern central banks. It describes
the conventional instruments used in advanced economies and the
unconventional instruments that have been widely adopted since the
financial crisis of 2007-2008. Illuminating the role of central banks in
ensuring financial stability and as last resort lenders, it also offers
an overview of the international monetary framework. A flow-of-funds
framework is used throughout to capture this essential dimension in a
consistent and unifying manner, providing a unique and accessible
resource on central banking and monetary policy, and its integration
with financial stability.
Addressed to professionals as well as bachelors and masters students of
economics, this book is suitable for a course on economic policy. Useful
prerequisites include at least a general idea of the economic
institutions of an economy, and knowledge of macroeconomics and monetary
economics, but readers need not be familiar with any specific
macroeconomic models.