Monetary Policy Targets and Macroeconomic Equilibrium. Some Theoretical Remarks

Abstract

Purpose: The article attempts to systematize the strategies undertaken by individual countries (groups of countries) after the 2007+ crisis with regard to stabilizing prices and supporting economic recovery. It is about highlighting the strengths and weaknesses of particular types of strategies as well as opportunities and threats related to their implementation. Methodology: In the theoretical analysis, three types of economies were distinguished, using as a criterion the orientation of a given economy towards securing price stability or supporting economic recovery. The classical dynamized AD-AS model, commonly used in macroeconomics, and the SWOT analysis were used as a research tool. Findings: The basis for differences in the approach of economic authorities of individual countries to the problem of stabilizing prices or supporting economic recovery is the mandate of the central bank. Depending on the type of strategy implemented by the central bank, individual countries and groups of countries react diametrically to exogenous shocks, which results in different results in terms of economic growth and employment. Practical Implications: The results can be utilized by central authorities (central banks) in formulating assumptions and forecasts of monetary policy. Originality / Value: The paper contains an  original division of countries / groups of countries due to their orientation in the field of medium-term stabilization policy. The analyzes of these countries are also original, having no equivalent in the world literature on this subject.