THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY
Currently there are many authors who consider that the only objective of the central bank should be the price stability and between the respective objective and financial stability there is incompatibility. As far we are concerned, we subscribe the idea that between price stability and financial sta...
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| Format: | Article |
| Language: | English |
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University of Pitesti
2012-09-01
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| Series: | Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice |
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| Online Access: | http://economic.upit.ro/repec/pdf/2012_1_8.pdf |
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| author | Magdalena RĂDULESCU Marinela TANASCOVICI |
| author_facet | Magdalena RĂDULESCU Marinela TANASCOVICI |
| author_sort | Magdalena RĂDULESCU |
| collection | DOAJ |
| description | Currently there are many authors who consider that the only objective of the central bank should be the price stability and between the respective objective and financial stability there is incompatibility. As far we are concerned, we subscribe the idea that between price stability and financial stability there are complementarities. And a strong argument in the favour of this position is also historical. Actually, many older or newer facts show that banking crises were often caused by the unfavourable macroeconomic situation coupled with the bad macroeconomic policies carried by the authorities. But, a monetary policy that aims the price stability reduces this risk. The truth is that the central banks have a series of tools that allow them to act for achieving both the objective of price stability, and that of the stability of financial sector. Although the financial stability is not, usually, an explicit objective for the modern central bank, the systematic financial instability can cancel their performances in achieving their major final objective: the price stability. Being that, because of the need that it creates to inject additional liquidity into the banking system, a crisis of the banking sector may directly affect the monetary stability. Here the mentioned complementarities arise between price stability and financial stability, although the achievement of the first does not necessarily involve the assurance of the last. |
| format | Article |
| id | doaj-art-efa2b764a2b843408cbefaa9ec84f9dd |
| institution | DOAJ |
| issn | 1583-1809 |
| language | English |
| publishDate | 2012-09-01 |
| publisher | University of Pitesti |
| record_format | Article |
| series | Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice |
| spelling | doaj-art-efa2b764a2b843408cbefaa9ec84f9dd2025-08-20T03:22:21ZengUniversity of PitestiBuletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice1583-18092012-09-011117984THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITYMagdalena RĂDULESCUMarinela TANASCOVICICurrently there are many authors who consider that the only objective of the central bank should be the price stability and between the respective objective and financial stability there is incompatibility. As far we are concerned, we subscribe the idea that between price stability and financial stability there are complementarities. And a strong argument in the favour of this position is also historical. Actually, many older or newer facts show that banking crises were often caused by the unfavourable macroeconomic situation coupled with the bad macroeconomic policies carried by the authorities. But, a monetary policy that aims the price stability reduces this risk. The truth is that the central banks have a series of tools that allow them to act for achieving both the objective of price stability, and that of the stability of financial sector. Although the financial stability is not, usually, an explicit objective for the modern central bank, the systematic financial instability can cancel their performances in achieving their major final objective: the price stability. Being that, because of the need that it creates to inject additional liquidity into the banking system, a crisis of the banking sector may directly affect the monetary stability. Here the mentioned complementarities arise between price stability and financial stability, although the achievement of the first does not necessarily involve the assurance of the last.http://economic.upit.ro/repec/pdf/2012_1_8.pdffinancial stabilitprice stabilityevaluationmonetary policy |
| spellingShingle | Magdalena RĂDULESCU Marinela TANASCOVICI THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY Buletin ştiinţific: Universitatea din Piteşti. Seria Ştiinţe Economice financial stabilit price stability evaluation monetary policy |
| title | THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY |
| title_full | THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY |
| title_fullStr | THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY |
| title_full_unstemmed | THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY |
| title_short | THEORETICAL CONSIDERATIONS OF PRICE STABILITY AS PART OF THE FINANCIAL STABILITY |
| title_sort | theoretical considerations of price stability as part of the financial stability |
| topic | financial stabilit price stability evaluation monetary policy |
| url | http://economic.upit.ro/repec/pdf/2012_1_8.pdf |
| work_keys_str_mv | AT magdalenaradulescu theoreticalconsiderationsofpricestabilityaspartofthefinancialstability AT marinelatanascovici theoreticalconsiderationsofpricestabilityaspartofthefinancialstability |