Executive Summary Essay Example | Topics and Well Written Essays - 250 words - 2

Executive Summary - Essay Example the euro exchange economy can also be used to remove the lower bound which has an effect on the short period threatening free nominal interest (Buiter, 2010, p. 219). On the other hand, during price setting, New-Calvo-Woodford approach can be used in setting price. Their approach involve secretive division in the euro-currency financial system, government in the euro exchange economy, equilibrium in the euro currency economy, deterministic steady state in the euro currency economy and lastly the lower bound which can become a binding constraint in the euro currency economy (Buiter, 2010 p.223). In prevailing over the lower bound on nominal charge, one can use the following strategies: eliminating currency, disburse negative interest rates on money (Buiter, 2010) or taxing money or even dividing the standard of trade. The three methods of eliminating subordinate bound on nominal interest plays a role in making it possible to ensure that it target the true stability of prices (Buiter, 2010). The author use of quotes from outside source gives a back up to the points that are highlighted in the report. He used seventy outside sources to support his main ideas concerning the monetary policy. The examples used are ones that have methodology to come up with the main idea