Monetary Conditions Index


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Monetary Conditions Index

An index tracking various measures affecting monetary policy. Different central banks include different measures in their MCIs, but they always include major exchange rates and prevailing interest rates. The MCI can help a central bank determine whether its monetary policy is too loose or too tight. The Bank of Canada was the first, and is the most prominent user of an MCI.
References in periodicals archive ?
This requirement is fulfilled by the introduction of monetary conditions index by bank of Canada.
There are numbers of studies that have estimated Monetary Conditions Index for different countries.
Substituting (7) and (8) into (6) yields the monetary conditions index in the standard case of inflation targeting:
The monetary conditions index appears on the left-hand side of equation (9) while the variables that the index responds to appear on the right-hand side.
1999), Interpreting a monetary conditions index in economic policy, Norges Banks Skriftserie/Occasional Papers No.