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How to Measure the Monetary Stance
Author:
Olamide Harrison https://isni.org/isni/0000000404811396 International Monetary Fund

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Vina Nguyen
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Series:
IMF How To Notes
Volume/Issue:
Volume 2025: Issue 003
Language:
English
Publication Date:
30 Jan 2025
DOI:
https://doi.org/10.5089/9798400298882.061
ISBN:
9798400298882
ISSN:
2522-7912
Pages:
24
Keywords:
Monetary policy stance; natural interest rate; neutral interest rate; yield curve; data IMF Library; ante real interest rates; publication order; inflation expectation; Real interest rates; Central bank policy rate; Inflation; Monetary stance; Global
Legal-disclaimer:
Fiscal Affairs Department (FAD) How to Notes offer practical advice from IMF staff members to policymakers on important fiscal issues. The views expressed in FAD How to Notes are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This note provides a conceptual framework to organize discussions of the appropriateness of the monetary policy stance and presents tools that country teams can employ to measure, report, and evaluate the stance of monetary policy. The note focuses exclusively on aggregate demand considerations—on whether the stance is tight or loose—without considering whether such a stance is appropriate for achieving policy objectives. The latter requires considering aggregate supply and Phillips Curve trade-offs. The note does not cover other macroeconomic policies, such as macroprudential or fiscal measures, which could also have a considerable impact on the effectiveness of monetary policy.
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Cover IMF How To Notes
IMF How To Notes
ISSN:
2522-7912
Publisher:
International Monetary Fund