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 ?

"Monetary conditions index for Pakistan", SBP Research Bulletin, Volume 3, Number 2.

"Monetary Conditions Index: A Composite Measure of Monetary Policy in Pakistan", The Pakistan Development Review, 41:4, pp.

A Pragmatic Model for Monetary Policy Analysis I: The Case of Pakistan

Nymoen (1996) Hazards in Implementing: A Monetary Conditions Index. Oxford Bulletin of Economics and Statistics 54, 4.

Hong Kong Monetary Authority (2000) A Monetary Conditions Index for Hong Kong.

Monetary conditions index: a composite measure of monetary policy in Pakistan

After inserting equations (7) and (8) into equation (11), we obtain the alternative monetary conditions index:

Design flaws in the construction of monetary conditions indices? A cautionary note

(1999), Interpreting a monetary conditions index in economic policy, Norges Banks Skriftserie/Occasional Papers No.

The unintended consequences of using an MCI as an operational monetary policy target in New Zealand: suggestive evidence from rolling regressions