Share This Article:

Economic Definition of monetary policy channels. Defined.

Offline Version: PDF

Term monetary policy channels Definition: The routes through which monetary policy by the Federal Reserve System affects aggregate production and macroeconomic activity. The six most important monetary policy channels are: interest rate, exchange rate, wealth, equities, bank lending, and balance sheet. These six channels are interdependent and mutually reinforcing. The interest rates channel is usually the most important, but all six channels generally come into play.


« monetary policy | monetary policy targets »


Alphabetical Reference to Over 2,000 Economic Terms