What are the key principles underlying the monetary policy transmission mechanism? How do commercial banks and non-banking financial institutions contribute to the transmission of monetary policy in the economy?
Introduction Monetary policy is the process by which a country’s central bank controls the money supply and interest rates to achieve macroeconomic objectives such as inflation control, economic growth, and employment. The effectiveness of monetary policy depends on its transmission mechanism – the channels through which policy decisions affect the broader economy. Both commercial banks […]