Conventional Paths of Transmission of Monetary Policy: An Introduction

Praveen Kumar; Dr. Mahendra Ranawat

doi:10.36676/jrps.v15.i2.1623

Authors

Praveen Kumar Research Scholar, Department of Economics, Faculty of Social Sciences & Humanities, Bhupal Nobles’ University, Udaipur, Rajasthan
Dr. Mahendra Ranawat Associate Professor, Department of Economics, Faculty of Social Sciences & Humanities, Bhupal Nobles’ University, Udaipur, Rajasthan

DOI:

https://doi.org/10.36676/jrps.v15.i2.1623

Keywords:

Transmission mechanism, monetary policy, modes of monetary transmission, interest rate path, exchange rate path, credit path

Abstract

Since, the advent of new economic reforms (1991), the India has witnessed a significant rise in its growth. The process through which the changes are made in the monetary policy, influences the various macroeconomic variables like growth and inflation, is called as Monetary Policy Transmission Mechanism. Therefore, a deep knowhow (understanding) of the working of the various modes of monetary transmission becomes necessary for the efficient and effective functioning of Monetary Policy. The current paper explains the conventional paths of monetary transmission e.g. the interest rate path, the exchange rate path, the credit path (the bank lending path and the balance sheet path), the asset price path and the expectations path. The objective of this paper is to improve the understanding about the existing paths of the transmission mechanism of monetary policy subject to available literature. This will further provide basis for the future research in the area of the monetary economics to the interested researchers. This paper has used the literature from 1991 to 2022 for this purpose.

Author Biography

Praveen Kumar, Research Scholar, Department of Economics, Faculty of Social Sciences & Humanities, Bhupal Nobles’ University, Udaipur, Rajasthan

Assistant Professor, Department of Commerce, Keshav Mahavidyalaya, University of Delhi

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