The Roles of IT in the Conduct of Modern Monetary Policy

Abstract

This chapter reviews the roles of information technology (IT) from two perspectives. First, from the macroeconomic perspective, the IT revolution induced output growth and new financial innovations such as asset-backed securities and electronic money. However, these phenomena complicate the conduct of monetary policy, but they will not totally demise its effectiveness. Second, from the operational level, IT applications currently take roles in enhancing operational efficiency, decision-making process and innovative practice of monetary authorities in central banks throughout the world. The degree of implementing IT applications in the conduct of monetary policy, in turn, may become another determinant of monetary policy framework in the future.