أنشئ حسابًا أو سجّل الدخول للانضمام إلى مجتمعك المهني.
Hi, this question has no easy answer, but I will try to underline the most important aspects. When a central bank decides to alter the monetary base (the amount of currency in an economy), it takes into account numerous indicators to know whether or not the economy needs and can support that alteration. The type of indicators most commonly used will be Inflation rate, expectations of future inflation rate, level of employment, economic growth rate, M3 (the least liquid form of money), credit conditions and by this I mean the health of the banking system and whether or not they are giving credit to families and businesses. This is in a very general way the most important aspects when deciding to alter or not the monetary base. Just a reminder, that another aspect very important to not forget id the central bank mandate, this is, what is their objective, for example if you take the ECB which is an inflation targeting central bank, it would most likely give more importance to current and future inflations rates then to level of employment, or economic growth, as their sole purpose is to maintain inflation below but close to2%. Most of the major central banks in the world follow this policy of inflation targeting, some of them state it very clearly and others do not, but in general in major economies the central bank will follow this policy, or a very similar one.
