Monetary in sentence

5081 examples of Monetary in a sentence

Moreover, the European Central Bank will have less space to use monetary policy to kick-start the economy: interest rates are already at zero, and a new asset-purchase program would inevitably be controversial.

Many countries would have limited scope for counter-cyclical fiscal policy, either because of the EU’s rules on public debt or because market tolerance for public debt is lower in a monetary union, as has become apparent since 2010.

Normally, if a country’s fiscal capacity is weakened, it could respond by coordinating monetary and fiscal policy.

But it would demonstrate that eurozone countries recognize the importance of policy coordination, whether fiscal consolidation during good times or counter-cyclical fiscal policy during bad times to minimize the chances of a debt crisis in the monetary union’s weaker economies.

The economist Nouriel Roubini has predicted that China’s economy will most likely slow sometime between 2013 and 2015, the point at which its fixed-asset investments of nearly 50% of GDP will demand social and monetary returns.

Cheap labor and monetary management will not do the trick on their own.

Robert Mundell, a Canadian who won the Nobel Prize in economics in 1999, was the first person to write about the benefits of monetary unions.

This does not necessarily imply that Italian authorities were bad or inept, only that the rules governing monetary and fiscal policymaking in Europe before the EMU were no longer appropriate for the highly fluent capital markets that had developed over the previous two decades.

By contrast, the defining event shaping European monetary policy is the hyperinflation of the 1920’s, filtered through the experience of the 1970’s and 1980’s, when central banks were enlisted once again to finance budget deficits – and again with inflationary consequences.

Indeed, delegating national monetary policies to a Europe-wide central bank was intended to solve precisely this problem.

The same dangers arise for monetary policy.

Similarly, the ECB might consider not only how monetary accommodation allowed governments to run large budget deficits in the 1920’s, but also how central bankers’ failure to respond to the financial crisis of the 1930’s fed political extremism and undermined support for responsible government.

When I consider the European economy, the ECB’s failure to provide more monetary support for economic growth appears to be directly analogous to Europe’s disastrous monetary policies in the 1930’s.

Europeans should ponder why the inflationary 1920’s, rather than the politically catastrophic 1930’s, have become the historical lodestar for current monetary policy.

That was the defining episode for American monetary policy.

For example, when the Delors Committee prepared its report in 1988-1989 on how a monetary union could be established in Europe, experts devoted considerable attention to the issue of whether market pressure would suffice to discipline states.

Those who emphasize the historical uniqueness of Europe’s monetary solution insist that other countries – which control their own monies – could not possibly fall into such a predicament.

The thinking behind the 1990’s approach to monetary policy is still fundamentally valid, but it requires institutional strengthening.

The EU has suffered a prolonged economic slump since the 2008 financial crisis, largely because the German government vetoed the kind of monetary and fiscal stimulus that helped to pull the US out of recession in 2010.

While the EAU is still only a customs union, the European Union’s experience suggests that a successful free-trade area leads over time to broader economic, monetary, and eventually political integration.

Then, perhaps a couple of decades after the customs union is formed, its members consider creating a true monetary union with a common currency (the Eurasian ruble?) that can be used as a unit of account, means of payment, and store of value.

As the eurozone experience proves, sustaining a monetary union requires banking, fiscal, and full economic union.

In France, the idea that now dares to speak its name is that the country will sink into an ever-deeper economic malaise unless it regains its monetary sovereignty.

The sovereign-debt-and-banking crisis that has roiled the monetary union since 2010 has steadily exposed the realities at play here, as irrevocably fixed exchange rates lock in and deepen differences in eurozone members’ competitiveness.

In a monetary union, there are only two ways to close a competitiveness gap between countries: transfers from the more competitive to the less competitive, or internal devaluation, which means real wage cuts.

So far, the “bazooka” represented by the ECB’s “outright monetary transactions” program has had the desired effect – without having to be used.

Will Germany agree to such a relaxation – or, for that matter, to Hollande’s implicit demand that the ECB follow Japan’s example and loosen monetary policy to drive the exchange rate back down?

Unlike Japan (and, of course, the United States), France, as a member of a monetary union, cannot pursue domestic goals unilaterally.

There are two reasons why, until now, the second option – leaving the monetary union – has been unthinkable.

This strategy’s success, starting with the speed of restored access to external financing, would depend on the credibility of government policies – monetary, fiscal, and, above all, the radical and indispensable supply-side reforms for which there would now be breathing space.

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