Monetary discipline explained

Monetary discipline is a phrase used by some economists when speaking of monetary policy, generally meaning limiting the money supply of an economy in some way.^{[1] [2] [3]}

Definitions

One definition of monetary discipline is a central bank matching the money supply to the level of production or reserves in an economy.^[4] This definition holds that money printing should have a relationship to a particular economic equation, rather than being influenced by politics.^[4]

Another definition is constraining the money supply, limiting inflation, and growing an economy by increasing the velocity of money.^[5]

Another way of achieving monetary discipline is by keeping a pegged exchange rate, thereby matching a money supply to a foreign currency.^[6]

Notes and References

1. Melitz. Jacques. 1987-02-17. Monetary Discipline, Germany, and the European Monetary System. en. Rochester, NY. 884539.
2. Neyapti. Bilin. Ozgur. Secil. 2007. The Effects of Fiscal and Monetary Discipline on Budgetary Outcomes. Contemporary Economic Policy. en. 25. 2. 146–155. 10.1111/j.1465-7287.2007.00034.x. 1465-7287. 11693/23491. 21667885 . free.
3. Dalmazzo. Alberto. 2014. Monetary Discipline as a Substitute for Fiscal Reforms and Market Liberalisations. Economic Notes. en. 43. 3. 193–210. 10.1111/ecno.12018. 155078596 . 1468-0300.
4. Web site: Ways of Controlling Inflation: Recommendations to Zimbabwean Policy Makers . March 7, 2011 . May 22, 2012.
5. Web site: Minyan Mailbag - Money Supply and Real Estate . Succo, John . October 11, 2004. May 22, 2012.
6. Fielding. David. Bleaney. Michael. 2000. Monetary Discipline and Inflation in Developing Countries: The Role of the Exchange Rate Regime. Oxford Economic Papers. 52. 3. 521–538. 10.1093/oep/52.3.521. 3488640. 0030-7653.