Monetary discipline
From Wikipedia, the free encyclopedia
Monetary discipline is a phrase used by some economists when speaking of monetary policy, generally meaning limiting the money supply of an economy in some way.[1][2][3]
Definitions
One definition of monetary discipline is a central bank matching the money supply to the level of production or reserves in an economy.[4] This definition holds that money printing should have a relationship to a particular economic equation, rather than being influenced by politics.[4]
Another definition is constraining the money supply, limiting inflation, and growing an economy by increasing the velocity of money.[5]
Another way of achieving monetary discipline is by keeping a pegged exchange rate, thereby matching a money supply to a foreign currency.[6]