Find the analytic balance sheet of the central bank of your country, either from the IMF International Financial Statistics or the website of your country’s central bank.
- How much is base money in your country? Express this both in units of national currency and in percent of GDP.
- How much of base money is currency in circulation? How much are bank reserves?
- How much did base money grow in the past five years?
- How did the central bank use the expansion of base money? That is, what were the developments in NFA and NDA?
- How much has inflation been in your country in the past five years? (the reason for this question will become clear later in the module--we promise).
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Find the depository corporation survey of your country.
· How much is broad money? Express this both in units of national currency and in percent of GDP.
· How large are NFA and NDA? How large is credit to the private sector? How much is credit to the government
· How much has broad money grown in the past five years? What changes happened at the same time in NFA and NDA?
· Can you associate the developments described above with any other developments in the economy?
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How does the central bank of your country conduct monetary policy? What are the anchors and the targets? Under what type of regime does the exchange rate of your country operate? You may find out from the web site of the central bank of your country or from the IMF Annual Report on Exchange Arrangements and Exchange Restrictions, a publication that the IMF produces each year and that classifies the exchange rate regime and monetary policy of each member country.
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