Measuring monetary policy: Operating procedures and intermediate strategies

The monetarist approach to monetary policy. In 1974, when German monetary policy was freed from the exchange rate constraints of the Bretton Woods era, the Bundesbank implemented a policy of monetary targeting. An annual monetary target for 1975 was pre-announced in December 1974. The policy had been maintained until January 1999 when the ECB took over the responsibility for monetary policy in Europe. The Bundesbank’s strategy reflected its adoption of the monetarist view to consider inflation as a monetary phenomenon. For that reason, controlling the money stock was thought to be appropriate to achieve its statutory goal of price stability. It started with targeting a point in money growth and from 1979 targeted 8 2. Measuring monetary policy money within a projected range. Thereby, in 1988, the Bundesbank shifted from “central bank money” to M31. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.