The Role and Function of Shadow Monetary Policy Committee Print

Shadow Monetary Policy Committee is an independent institute that includes monetary experts. This institute evaluates central bank policies and makes some suggestions about appropriate changes in these policies to achieve monetary policy targets. It has the capacity to create some communication channels between experts and policy makers and also informs them about advantages and weaknesses of monetary and fiscal policies. This committee can also encourage policy makers to better communicate with society and be responsible about the adopted policies. In this paper, we pay attention to the restrictions of the Monetary and Credit Council (MCC) as one of the pillars of central bank. Highlighting the advantages of Shadow Monetary Policy Committee, we emphasis on its role in improvement of policy making. We also survey different dimensions of organizing such a committee like its targets, functions, members’ combination, frequency of meetings and its communication with the media. One of the most important functions of organizing such a committee is the improvement of monetary decisions quality utilizing the scientific and experiential analyses. The greatest challenge of organizing this committee is its fiscal independence from monetary and fiscal authorities. This can be a tough job because many scientific and research centers in Iran finance their activities through public funds