Use of Monetary Aggregate to Target Nominal GDP 

Background

Central banks such as Reserve Bank of India (RBI) or The Federal Reserve System of the USA are the national institutions which are responsible for setting, implementing and managing the monetary policy including money supply, interbank borrowing interest rate, reserve requirements and open market operations. Monetary policy impacts lending rates set by banks which impacts both aggregate demand and supply. This in turn impacts employment and inflation, which influences the trajectory of growth rate of Gross Domestic Product (GDP).

Learning Outcome

  • LO #1: Understand the role of monetary policy instruments on aggregate demand and aggregate supply by learning interaction between real goods market and financial markets.
  • LO #2: Conduct data analysis to verify the role of interest rates on inflation and GDP growth rate by analyzing data from various countries over a period using tools like RStudio, Gretl, Python etc.

What is on offer?

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