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Monetary policy

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Monetary policy

Policy rate, economic development and inflation: a central bank’s decision-making process

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Updated on 08.01.2023

Latest change:

08.01.2023

Adjustment of documents due to the move of the SNB policy rate into positive territory

Entire change history

2–4 lessons
German, French, Italian
KV
FVB
GYM
Easy to use

Overview

The six-page advanced text explains the basic mechanism of monetary policy, the decision-making process behind it, and today’s unconventional monetary policy.

  • Students work through the topic by way of the associated worksheet.
  • For those wishing to delve further into the subject, six source texts are provided together with a brief introduction that puts them into context.

Learning objectives

The students are able to:

  • describe and explain the basic correlating effects of interest rates, inflation and economic development; 
  • name and describe the goals and the main instrument of conventional monetary policy;
  • describe the monetary policy decision-making process;
  • understand the challenges of today’s unconventional monetary policy and put them into context.

Advanced text

Monetary policy
Text on the basic mechanism of monetary policy, the underlying decision-making processes and current monetary policy.
Authors: Pascal Meichtry, Banque de France and Manuel Wälti, Swiss National Bank

Worksheet

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Worksheet

Exercises on the fundamental interdependencies between interest rates, inflation and economic development.
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Sample answers Worksheet

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Extras

Seven source texts on the monetary policy of the Swiss National Bank (SNB)
Document with links to seven source texts on the monetary policy of the Swiss National Bank (SNB).

Additional information

Links

The world of the National Bank

The world of the National Bank, an SNB publication, provides information on the SNB’s monetary policy in an easily understandable way.

our.snb.ch

The National Bank

The National Bank, an SNB publication, outlines the most important aspects of monetary policy, the impact of monetary policy on the economic situation and the practical implementation.

www.snb.ch

Videos
Conventional monetary policy
Unconventional monetary policy
Money creation

Credits – Monetary policy

Concept:
Iconomix

Authors:
Dr. Pascal Meichtry, Banque de France; Dr. Manuel Wälti, SNB

Expert advice:
Dr. Petra Tschudin, SNB

Graphics:
clearbrand gmbh, Zurich

Translation & proofreading:
SNB Language Services

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