دور السياسة النقدية في ضبط التضخم (نموذج إثيوبيا من الفترة ) 2004-2014=The role of monetary policy in controlling inflation Sample Ethiopia from 2004- 2014

Abstract

The research subject is to study the role of monetary policy in controlling inflation in world economy as a sample of Ethiopian economy.The research problem for this study is concern that inflation is a monetary phenomenon a affecting the national economy and also it has to be for monetary policy to play an active role in lowering inflation rates The importance of research can see in the evaluation of the effectiveness of monetary policy in the treatment of inflation or that monetary policy significance its importance in achieving an acceptable level for control inflation. This study aimed to identify the role monetary policy pursued in this period and the impact of monetary policy on platform for controlling inflation . This research follows a descriptive and analytical approach to historical knowledge of the effectiveness of monetary policy to reduce inflation by tested the following hypotheses There is a direct correlation between inflation and money supply and also There is an inverse relationship between the exchange rate and inflation. The most important result of this research is that The research found out the money supply has a direct impact on the level of inflation and the existence of positive relationship between the increase of money supply and the level of inflation. Generally, this is reflected by the continued rise of prices of the various products. A situation ensues where excess amounts of money tend to be chasing too few goods. In this perspective, this study tested on whether monetary policy is an effective tool in the combating of inflation. The data utilized was derived from Ethiopian national bank over a range of years. The period in perspective was that between the years 2004 and 2014. During this period, Ethiopia faced various catastrophic economic events. Some of political stabilities, depressions, and economic development were vividly witnessed. In addition, the level of inflation was at an all-time high. During this duration, various monetary policies and tools were utilized by the Central Bank of Ethiopia. As such, this range was most suitable for this research. The main recommendations were that that commercial banks and the entire banking sector play a very vital role in the implementation of the monetary policies. Hence, there exist a need for the active co-operation and harmony between the banking sector and the monetary policy authorities in terms of policy formulation and decision making.