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Intermediate Targets |
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Intermediate targets An intermediate target is a variable (such as the money supply) that is not directly under the control of the central bank, but that does respond fairly quickly to policy actions, is observable frequently and bears a predictable relationship to the ultimate goals of policy. Intermediate Target Anything under indirect as opposed to direct control of a central bank. An example is money supply; a central bank usually cannot shred dollars when it wishes to reduce the money supply. Rather it raises interest rates, which provides an incentive for people to reduce the amount of money they pump into the economy. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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