Monetary Policy of the World Major Central Banks

This paper examines the experience of the world major central banks in conducting monetary policy. For this purpose different monetary policy instruments will be studied, including those used by central banks in the USA, the Eurozone and China. Besides the paper also covers current macroeconomic situation in the studied regions, as well as the experience of their respective central banks in applying monetary policy to combat financial crisis and offers an outlook of the most expected changes to monetary policy in the near future. This paper also analyzes the effectiveness of various monetary policy instruments. This is done by evaluating the degree of their influence on inflation, which is the main policy target for the most central banks. This analysis is performed for the central banks of the USA and China. The results are assessed in order to establish any differences and similarities in the effectiveness of various monetary policy instruments in the two countries. Key words: effectiveness of monetary policy; conventional and unconventional measures; quantitative easing; the US FED; the ECB; the People's Bank of China.