UNCONVENTIONAL MONETARY POLICY AND A MODERN VIEW ON CASH ISSUES

DOI: 10.36871/ek.up.p.r.2020.10.05.003
UDC 336

Authors

Ch. A. GOGICHAEV,
Moscow State Institute of International Relations of the Ministry of Foreign Affairs of Russia, Moscow, Russia

Abstract

In the aftermath of the 2008 global financial crisis, central banks in developed countries began to resort to unconventional monetary policy measures as interest rates approached zero. Such actions have led to the expansion of the balance sheets of central banks due to the abnormal growth of excess reserves. The article discusses the misconception that such an increase in the monetary base can directly affect the volume of money supply through the action of the money multiplier mechanism and the narrow credit channel of the transmission mechanism. The opinion disputed that non-traditional measures of monetary policy, pro-vided they are adequate, lead to an increase in inflationary risks in the economy. The work focuses on the lack of a close relationship between reserves, the level of lending and the money supply, and attempts made to assess the boundaries of the monetary policy methods under consideration.

Keywords

monetary policy, quantitative easing, money multiplier, excess reserves, non-cash money issue.