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Critically analyze the purpose of monetary policy and different methods employed by central banks to achieve monetary policy goals

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Description

Recall the Requirements;

  1. Critically analyze the purpose of monetary policy and different methods employed by central banks to achieve monetary policy goals (50%)
  2. Evaluate the Role of Financial Intermediaries in smoothing out incompatibilities between savers and borrowers and promoting a well-functioning financial system (50%)

Overall, please structure this task, as an essay. Please refer to the structure recommended below, for purposes of creating YOUR OWN OUTLINE. Obviously, it is prudent to NOT touse a similar outline, since this order requires several copies.

Introduction (200 – 250 words)

  • This section should provide some background information, related to both sections I and II. Eventually, narrow down to aims and structure used in your essay.
  • As I explained previously, the introduction should be among the most interesting section in any task. In most cases, most readers will judge your writing skills and mastery of relevant topic, from the first few sentences. For this reason, I emphasize that you should use well-structured sentence structures in the introduction. It is in this section that, you should demonstrate mastery of the topic. If you are not sure about a given argument or opinion, it is better your conduct an extensive research on the same. Overall, we expect justified and correct arguments in the entire essay, specifically, in your introduction.

*Under part I and II below (Reports body), do not introduce irrelevant background information. Such information should be capture in the introduction. Please respond directly to specific section’s requirements. 

Part I

Monetary Policy

Critical Analysis on the purpose of monetary policy (Not less than 625 words)

Different Methods Employed by Central banks to Achieve Monetary Policy Goals (not less than 625 words

Part II

Evaluation on the Role of Financial Intermediaries

Smoothing out incompatibilities between savers and borrowers (not less than 625 words)

 Promotion of a well-functioning Financial System (not less than 625 words)

Conclusion (200 – 250 words)

  • This section should highlight, the core findings from both part 1 and II above.
  • You should not introduce new arguments in this section

References

We expect a minimum of 30 peer reviewed academic journals. Such journals are most reliable and should be used, in addition to other reliable sources (websites, among others). These references should be very accurate, as they will all be verified. Remember to borrow as much ideas as possible, from PDF sent with this order.

SOLUTION 

Introduction

From the definition, (Hughen, 2015) explicates that monetary policy refers to the process deployed by monetary authority of any country, in efforts controlling money supply in an economy. In this context ‘monetary authority’ can be the currency board, central bank or other regulatory committee. However, according to Jia, Guo and Wang, 2015), monetary policy are usually devised and implemented by the central bank in most countries. Quite often, monetary policies targets at influencing interest rates and also inflation rates. The core focus is to improve trust in a given currency while also enhancing stability in prices (Omran et al., 2015; Šehović, 2014).  Considering financial intermediaries, Beck, Colciago and Pfajfar (2014) elucidates that, they play a crucial role in smoothing out incompatibilities between savers and borrowers and promotion of a well-functioning financial system. Ideally, borrowers and savers have diverging needs and interests (Barton, Futris and Nielsen, 2015; Kálmán, 2015). For this reason, direct lending is highly inefficient. It is for this reason that, financial intermediaries intervenes (Beck, Colciago and Pfajfar, 2014). Also, financial intermediaries enable execution of various roles of financial systems. Among many others, such functions of a financial system include; management of risks, handling incentives problem, provision of information, transfer of resources across space and time, settling and clearing payments and pooling resources together. Ideally, such crucial roles of the financial system are best achieved through reliance on financial intermediaries (Nolle, 2015; Constâncio, 2014).

On this premise, this essay is split into two core parts. Part I critically analyses the purpose of the monetary policy and different methods employed by central banks to achieve monetary policy goals. Part II evaluates the role of financial intermediaries in smoothing out incompatibilities between savers and borrowers and promoting a well-functioning financial system.

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