Considerations Regarding The Concept Of Monetary Policy

This paper aims to make a conceptual analysis of the monetary policy notion by reviewing the literature regarding the concept of monetary policy, as well as, by highlighting the way in which monetary policy opinions have changed in time. Further, we presented the transmission mechanism of monetary policy together with the most important channels through which central banks, by using various monetary policy instruments, can affect the dynamics of aggregate demand and prices in the economy. The paper ends by reviewing the main objectives of central banks and their evolution in time.