## Do Monetary Policy Outcomes Promote Stability in Fragile Settings?

_IMF Working Papers, May 20, 2022_

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## Bibliographic details
- Authors: Oumar Diallo, Steve Loris Gui-Diby, Patrick A. Imam
- Published: May 20, 2022
- Series: IMF Working Papers

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### Main findings
- The combination of reduction of inflation and lower unemployment delivers the highest payoff in terms of promoting peace and cohesion.
- Low inflation is identified as the primary desired monetary policy outcome for reducing fragility.
- Low unemployment rate is identified as a secondary desired monetary policy outcome for reducing fragility.
- Results broadly confirm the above “winning” combination even when setting aside challenges of monetary policy transmission.
- A series of robustness tests confirm the core findings.

### Scope and approach
- The paper examines the universe of the most prominent combinations of pursued monetary policy objectives across fragile settings.
- It assesses relationships between monetary policy outcomes and fragility, focusing on how different outcome combinations affect peace and cohesion.

### Policy implications and interpretation
- Paying attention to monetary policy outcomes is important in the context of reducing fragility.
- Policymakers in fragile settings should prioritize achieving low inflation, with low unemployment as a complementary objective, to maximize gains in peace and social cohesion.
- Consideration of monetary policy transmission challenges is necessary, but the outcome-focused results remain robust.

### Publication and metadata
- Authors: Oumar Diallo, Steve Loris Gui-Diby, Patrick A. Imam
- Publication date: May 20, 2022
- Series: Working Paper No. 2022/096
- Volume: 2022
- Issue: 096
- Pages: 55
- ISBN: 9798400211058
- ISSN: 1018-5941
- Subjects: Exchange rates, Foreign exchange, Inflation, Labor, Monetary policy, Monetary policy frameworks, Price stabilization, Prices, Unemployment rate
- Keywords: Exchange rates, Fragile settings, Fragility, Global, Inflation, monetary policy, Monetary policy frameworks, monetary policy outcome, monetary policy transmission, objectives, outcome variable, Price stabilization, pursued monetary policy objective, Unemployment rate

*Oumar Diallo, Steve Loris Gui-Diby, and Patrick A. Imam, "Do Monetary Policy Outcomes Promote Stability in Fragile Settings?", IMF Working Papers 2022, 096 (2022), May 20, 2022.*

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_Source: https://www.imf.org/en/publications/wp/issues/2022/05/20/do-monetary-policy-outcomes-promote-stability-in-fragile-settings-518203_