Abstract

GIL LEON, JOSÉ MAURICIO. MONETARY POLICY POSITIONS IN THE FACE OF ECONOMIC FLUCTUATIONS: A REVIEW OF THE THEORETICAL EVOLUTION. Finanz. polit. econ. [online]. 2015, vol.7, n.2, pp.381-401. ISSN 2248-6046.  https://doi.org/10.14718/revfinanzpolitecon.2015.7.2.9.

This paper explores the monetary policy positions from different economic schools of thought, which can be linked to the stability behavior of the economic and financial cycle. As such, it is based on the traditional debate between non-interventionism and interventionism. Classic and Neo-Classic authors who believe that money only affects prices uphold the former view. In the latter, Keynes postulates the need for monetary activism. Nevertheless, the 1960s marked the beginning of monetary neutrality as the dominating principle in monetary policy decision-making, so that, later, in the 1990s, the economic cycle was accepted within the policy rule. Finally, the text analyses how, with the 2008 financial crisis, an unconventional policy position was brought forth that later became the policy framework for economic recuperation leading to a debate on the use of macroprudential policy by the central banks.

Keywords : interventionism; discretionality; monetary rules; stability; central bank.

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