What causes delay in monetary policy?

As the name suggests, the delay of monetary policy is a time forfeiture that may occur between the onset of undesirable economic status and the real measure of the government to solve it, as well as the time necessary to undertake the government or the central bank. In this sense, the delay in monetary policy concerns the time when it could have passed between the time when monetary policy was introduced, and the real time needed to enter such a policy in the economy. Monetary policies relate to politicians that the central bank use to control undesirable economic conditions in the economy, including slow growth and inflation. If cash policies have been introduced, such as increased interest rates, certain factors such as transmission means can contribute to delay in its implementation.

One of the factors that contributes to the delay in monetary policy is pHydrum of the transmission of monetary policy to the economy. Assuming the aim of monetary policy is to reduce growing inflation, the central bank could decide to raise interest rates, in which case other banks in the economy will be the main vehicles for the transfer of monetary policy. If the central bank raises interest rates, other banks will also return by increasing their own interest rates and other fees for financial transactions. It will also be reflected in the way such banks will be connected to greater restrictions on the issue of loans to consumers.

Since the aim of the central bank is to reduce the consumption that is the cause of inflation, it is a sign of delay in monetary policy at a time when the central bank first introduced this policy for the first time, and the time when it actually began to manifest itself. The required effect in this case is the slowdown of consumption. Like drought, delay in monetary policy will last until consumers really start slowing down the pace of their consumption of goods and services. Another source of delayIn monetary policy, the result of the time for which consumers and businesses need to invest investments and businesses to demonstrate any type of noticeable reaction to monetary policy. In principle, the delay of monetary policy is usually the result of various modifications to various sectors of the economy of the new monetary policy.