Monetary Policy

Macroeconomic Trends and Analysis

Floating Exchange Rates Mundell-Fleming: Policy Under a Float

Floating exchange rates in Mundell-Fleming make monetary policy powerful and fiscal policy ineffective, because the free currency, not reserves, adjusts...

June 2, 2026

Feature image for “Reserve Bank of India Explained,” showing the RBI’s institutional anchors: its 1935 founding, 4% inflation target with a ±2% tolerance band, 5.25% repo rate, and 6-member Monetary Policy Committee since 2016.

Central Banking

Reserve Bank of India Explained: Inflation Targeting and the Policy Corridor

The Reserve Bank of India explained: the 2016 shift to flexible inflation targeting, the Monetary Policy Committee, the repo rate...

June 1, 2026

Feature image for “Reserve Bank of Australia Explained,” showing the RBA’s institutional anchors: its 1960 founding, dual mandate for prices and jobs, 2–3% inflation target, and the 2025 board reform.

Central Banking

Reserve Bank of Australia Explained: The Dual Mandate and a Reformed Board

The Reserve Bank of Australia explained: its dual mandate of price stability and full employment, the 2025 board reform, the...

June 1, 2026

Feature image for “State Bank of Pakistan Explained,” showing Pakistan’s central bank as it evolved from its 1948 founding toward a more independent monetary authority, with key tiles for the policy rate, 2022 autonomy reform, and price stability mandate.

Central Banking

State Bank of Pakistan Explained: Autonomy, Inflation Targeting, and Fiscal Dominance

The State Bank of Pakistan explained: how the 2022 autonomy reform, inflation targeting, and the pull of fiscal dominance shape...

May 31, 2026

Feature image for “People’s Bank of China Explained,” showing a compact policy-toolkit card with the 7-day reverse repo rate, the 1-year and 5-year-plus LPRs, reserve requirement ratio cuts, and the yuan’s daily trading band.

Central Banking

People’s Bank of China Explained: Reserve Ratios, MLF, and Capital Controls

The People's Bank of China explained: how China's central bank uses reserve ratios, the reverse repo rate, the MLF, re-lending,...

May 31, 2026

Feature image for “Bank of Canada Explained,” showing four compact tiles for the Bank of Canada’s monetary-policy framework: the 2.25% overnight rate, the 2% inflation target since 1991, eight fixed announcement dates per year, and Crown corporation status since 1938.

Central Banking

Bank of Canada Explained: Forty Years of Inflation Targeting

The Bank of Canada explained: how the country's central bank, its 1991 inflation target, the Governing Council, and the overnight...

May 31, 2026

Economics in the News

US PCE Inflation April 2026: The Fed’s Favorite Gauge Hits a Three-Year High

US PCE inflation April 2026 hit 3.8 percent, a three-year high, as energy costs surged and growth slowed, leaving the...

May 29, 2026 12 min read

Inflation

Cost-Push vs Demand-Pull: A Modern Reassessment

The cost-push vs demand-pull framework still organizes inflation discussions, but modern episodes mix both forces. Expectations and markups complicate the...

May 28, 2026

Inflation

Inflation Persistence: Why Past Inflation Drives Future Inflation

Inflation persistence measures how strongly past inflation drives future inflation. It collapsed after the Volcker disinflation and rebounded modestly during...

May 28, 2026

Inflation

Sacrifice Ratio: Output Cost of Disinflation

The sacrifice ratio measures the output lost per percentage point of inflation reduction. The 1980s episodes produced ratios near 1.5;...

May 28, 2026