Introducing the Bank of England

Central Bank:

Monetary Policy Committee:

Policy Tools:

global swap lines in 2017

Policy Rules:

where growth is the average over the 3 year horizon and the change in monetary policy is relative to its setting at the start of that period, the constant is the average growth over that horizon at unchanged policy, ∆M is the change in monetary policy calibrated in the model as the change in the stock of asset purchases, and the coefficient reflects the impact upon demand (and output) of a more expansionary policy.
where the last term measures the deviation of the economy’s current output from its supply capacity (i.e. the output gap).
where the coefficient d1 is the degree to which higher output growth generates an increase in the economy’s supply capacity, d2 is the expected average growth rate of output, and d0 is the growth of the economy’s supply capacity without a monetary stimulus.




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