Monetary Policy in the Post Keynesian Theoretical Framework

Abstract

A política monetária na perspectiva pós-keynesiana fáBIo henrIque BITTeS TerraPhILIP areSTIS* RESUMo: o objetivo desta contribuição é desenvolver um modelo pós-keynesiano de política monetária, apresentando seus objetivos, instrumentos e canais de transmissão. A originalidade desta contribuição consiste, seguindo-se as propostas de Keynes (1936Keynes ( , 1945, em se instituir a administração de dívida como um dos instrumentos da política monetária, em conjunto com os tradicionais, taxa de juros e regulação. Ademais, o artigo constrói seu modelo teórico resgatando amplamente os escritos originais de John Maynard Keynes. Um modelo de política monetária erigido desta forma relaciona-se diretamente aos esforços pós-keynesianos de oferecer uma forma de condução da política monetária que seja alternativa ao Regime de Metas de Inflação, proposto pelo Novo Consenso Macroeconômico. PALAVRAS ChAVE: Teoria Keynesiana; Política Monetária; Política Econômica; Taxa de Juros; Administração de Dívida.ABSTRACT: The purpose of this contribution is to develop a Post Keynesian monetary policy model, presenting its goals, tools, and channels. The original contribution this paper develops, following Keynes's (1936Keynes's ( , 1945 proposals, is the use of debt management as an instrument of monetary policy, along with the interest rate and regulation. Moreover, this paper draws its monetary policy model by broadly and strongly relying on Keynes's original writings. A monetary policy model erected upon this basis relates itself directly to the Post Keynesian efforts to offer a monetary policy framework substantially different from the Inflation Targeting Regime of the New Macroeconomic Consensus.

Financial intermediaries and speculation in the foreign exchange market: the role of monetary policy in Iran’s economy

“…On the other hand, given the second discussion based on the existence of substitutive relation between the FIs and the EFM and the different effects of the FIs and the EFM on nominal and real sectors of Iran's economy and finally the third discussion relied on the potential effects of IR on the FIs and the FEM, we conclude: in the event of not repressing of NIR, the central bank and its monetary policy can affect the nominal and real sectors of Iran's economy through the channel of the FIs and the FEM. As the studies of Terra and Arestis (2017) and Beck et al (2014) did reach the same respecting the effectiveness of the monetary policy on the real sector of an economy through the channel of the FIs. Toraman and Başarir (2014) also concluded that central banks could affect the nominal (inflation) and real (employment) sectors of an economy through using IR in order to influence the stock market.…”

“…IR can be effective on bank deposits' attractiveness and, consequently, the firms' access listed on the stock market to bank loans for investing and, thus, their profitability outlook (El Wassal 2005;Yartey 2008). The effects of monetary policy on real sectors of an economy considerably depend on the status of the FIs (Terra and Arestis 2017;Beck et al 2014). The changes of IR affect investors' decisions to choose between risky assets and bank deposits.…”

“…Accordingly, there is a strong link between monetary policy, the FEM, and the FIs. In other words, the effects of monetary policy can be transmitted to nominal and real sectors of an economy by the channel of the FIs (Beck et al 2014;Terra and Arestis 2017) and the FEM. One of the monetary instruments which can realize this link between the FIs, the FEM, and Monetary policy is IR.…”