Economics Central Banks Around the World Question

Instructions:

This assignment about 1-2 pages ((for each part)), (between 500 and 600 words ((for each part)) with standard spacing and font size), including potential tables and charts. Concise answers are expected, and where appropriate they could be in the form of bullet points. The assignment is meant to facilitate a comparison across central banks, starting with their mandates. The starting point for information should be the websites of the central banks under study, but other sources may also be used.

Part 1)

Historical performance for the following four central banks:

Reserve Bank of Australia: https://www.rba.gov.au/

Central Bank of The Bahamas: https://www.centralbankbahamas.com/

Reserve Bank of India: https://www.rbi.org.in/

Swiss National Bank: https://www.snb.ch/en/

Please rely on the data available in the IMF’s WEO database for April 2021, available here:

https://www.imf.org/en/Publications/WEO/weo-databa…

The database includes annual data since 1980 and the IMF’s forecasts to 2025.

• Study the inflation forecasts to 2025. What does the IMF expect inflation to be in the economy? Is this consistent with the Central Bank’s strategy and definition of price stability? Explain.
• (ii) Study the historical data on inflation from 1980. Using the central bank’s current interpretation of price stability as a benchmark, how well has the Central Bank managed to achieve this goal over the past 40-50 years? Explain.

Part 2)

For the same central banks above please answer the following question:

Environmental sustainability:

An argument advanced in recent years is that Central Banks should institute policies to protect the environment. A pertinent question for any specific central bank is whether its statutory mandate is such that the central bank could take actions in that direction and if so what actions. For the CBs under study, what (if anything) has the CB communicated that it is doing, or planning to do, to contribute to environmental sustainability? Can the CB’s mandate be reasonably interpreted as to justify additional actions? Discuss