o:28767 Challenges for Modern Monetary Policy en Abstract: The first central banks were founded in the XVII century and monetary policy has been evolving ever since. Knowledge on monetary economy has improved significantly over the last couple of decades and a consensus has been reached in a number of areas. As a result, hyperinflations have been extremely rare over the past decades. The global financial crisis challenged traditional monetary policy that was based on the approach involving one instrument (reference interest rate) and one goal (price stability). It is obvious that we need a new approach to monetary policy and I believe that changes will happen gradually in the future. This paper consists of two parts. The first part covers the traditional monetary policy and deals with issues where consensus has been reached, as well as with issues on monetary policy objectives, trans- parency, and macroprudential policy. The second part addresses the issues that pose a challenge for mon- etary policy and for which there is no complete consensus. This part elaborates on the dilemma involving rules versus discretions, a new approach to banking supervision, monetary policy during a crisis, the role of econometric models, and the need for international coor- dination of monetary policy. Key words: Monetary Policy, Challenges, Financial Stability, Uncon- ventional Monetary Policy Instruments 1552099 10.2478/jcbtp-2018-0010 1552101 1800-9581 2023-04-11T12:19:22.756Z 44 no 46 Nikola Fabris Univerzitet u Beogradu Ekonomski fakultet 12815463 0000-0001-9500-1943 application/pdf 1208151 https://phaidrabg.bg.ac.rs/o:28767 no yes 16 70 92000001 11A03 Journal of Central Banking Theory and Practice 7 2 5 24 2018