Monetary Policy in the United States

Monetary Policy (Economics Term) in the Federal Budget Process

Meaning of Monetary Policy in the congressional and executive budget processes (GAO source): A policy affecting the money supply, interest rates, and credit availability that is intended to achieve maximum sustainable output and employment and to promote stable prices (interpreted as a low-inflation environment in practice). Monetary policy is directed by the Federal Reserve System. It functions by influencing the cost and availability of bank reserves through (1) open-market operations (the purchase and sale of securities, primarily Treasury securities), (2) changes in the ratio of reserves to deposits that commercial banks are required to maintain, (3) changes in the discount rate, and (4) changes in the federal fund rate. (See also Discount Rate; Fiscal Policy.)

Concept of Monetary Policy

In the U.S., in the context of Political Economy and Public Policy, Monetary Policy has the following meaning: Governmental decisions affecting the supply of money and the characteristics of its flow and exchange. The Federal Reserve Board is the dominant governor of monetary policy in the United States. (Source of this definition of Monetary Policy : University of Texas)

Monetary Policy

Resources

See Also

• Political Economy
• Public Policy

Resources

See Also

• Federal Appropriations
• Entries about the United States Budget Process in the Encyclopedia (including Monetary Policy)
• Public Debt

Further Reading

• Legislatures and the budget process: the myth of fiscal control

  (J Wehner, 2010)

• Reconcilable Differences?: Congress, the Budget Process, and the Deficit (JB Gilmour, 1990)
• Fiscal institutions and fiscal performance

  (JM Poterba, J von Hagen, 2008)

Monetary Policy in the International Business Landscape

Definition of Monetary Policy in the context of U.S. international business and public trade policy: Government policy efforts to manage the money supply in the economy in the pursuit of macro economic goals, such as low inflation, low unemployment, and high rates of economic growth.

Monetary Policy in the International Business Landscape

Definition of Monetary Policy in the context of U.S. international business and public trade policy: Management of the money supply, and thus the availability of credit, to support price stability and full employment.