IMF How To Notes

How to Measure the Monetary Stance

By Olamide Harrison, Vina Nguyen

January 30, 2025

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Format: Chicago

Olamide Harrison, and Vina Nguyen. "How to Measure the Monetary Stance", IMF How To Notes 2025, 003 (2025), accessed March 21, 2025, https://doi.org/10.5089/9798400298882.061

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Summary

This note provides a conceptual framework to organize discussions of the appropriateness of the monetary policy stance and presents tools that country teams can employ to measure, report, and evaluate the stance of monetary policy. The note focuses exclusively on aggregate demand considerations—on whether the stance is tight or loose—without considering whether such a stance is appropriate for achieving policy objectives. The latter requires considering aggregate supply and Phillips Curve trade-offs. The note does not cover other macroeconomic policies, such as macroprudential or fiscal measures, which could also have a considerable impact on the effectiveness of monetary policy.

Subject: Central bank policy rate, Financial services, Inflation, Monetary policy, Monetary stance, Prices, Real interest rates, Yield curve

Keywords: Ante real interest rates, Central bank policy rate, Data IMF Library, Global, Inflation, Inflation expectation, Monetary policy stance, Monetary stance, Natural interest rate, Neutral interest rate, Publication order, Real interest rates, Yield curve

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