Monetary Policy and Contemporary Financial Crisis—Basic Concerns

Jacek Tomkiewicz
(Kozminski University, Warsaw, Poland)

Abstract: Goal of the text is to show number of challenges which must face today major central banks. Impressive engagement of the central banks in counter-crisis policy leads to many controversial decisions and its results are not clear both for economic theory and for real economy. For now, one cannot show full overview of central bank’s policy—on the one hand, thanks to the expansionary monetary policy, recession was quite shallow and the risk in financial markets has declined, but on the other hand, few side effects of this policy can be mentioned, which can jeopardize economic stability in the future. Paper has theoretical character. Findings are based on literature review and analyze of major macroeconomic data. Text shows the most important areas which have to be investigated by central banks. There serious doubts about issues like: inflation targeting as a fundament for monetary policy, efficiency of monetary policy instruments and side effects of loose monetary policy.

Key words: central bank; monetary policy; financial crisis

JEL codes: E50, E51, E58