api: YAML JSON TOON Database
version: 1.0.0
format: json
dataset:
  slug: monetary-policy-tools
  title: Monetary Policy Tools
  description: Central bank instruments for managing money supply and interest rates.
  summary: "The instruments central banks use to steer money and credit: open market operations, reserve requirements, the discount rate, quantitative easing and interest on reserves, plus forward guidance, negative interest rates, yield curve control, repurchase agreements, inflation targeting and quantitative tightening."
  use_when:
    - You need a definition of a monetary tool and how it transmits to the economy.
    - You are comparing conventional and unconventional policy.
  caveats:
    - Tools differ by country and by central bank; not every central bank uses every tool.
    - Effects work through expectations and financial markets and can take months to appear.
  related:
    - fiscal-policy-tools
    - macroeconomic-indicators
    - economic-systems
  category: Economics
  category_slug: economics
  tags: economics,monetary,policy
  view_count: 0
  entry_count: 11
  fields:
    - section: data
      field: tool
      type: string
      example: Open Market Operations
    - section: data
      field: description
      type: string
      example: Buying and selling government securities.
data:
  - tool: Open Market Operations
    description: Buying and selling government securities.
  - tool: Reserve Requirement
    description: Fraction of deposits banks must hold in reserve.
  - tool: Discount Rate
    description: Interest rate charged to commercial banks for central bank loans.
  - tool: Quantitative Easing
    description: Large-scale asset purchases to increase money supply.
  - tool: Interest on Reserves
    description: Paying interest on bank reserves held at the central bank.
  - tool: Forward Guidance
    description: Public communication about the likely future path of interest rates to shape expectations.
  - tool: Negative Interest Rate Policy
    description: Setting policy rates below zero to discourage hoarding cash and encourage lending and spending.
  - tool: Yield Curve Control
    description: Targeting a yield on government bonds of a given maturity by buying as many as needed.
  - tool: Repurchase Agreements
    description: Short-term collateralized loans (repo) and their reverse used to add or drain reserves.
  - tool: Inflation Targeting
    description: A framework in which the central bank commits to a numerical inflation goal and adjusts policy to reach it.
  - tool: Quantitative Tightening
    description: Shrinking the central bank's balance sheet by letting assets mature or selling them.