The role of monetary policy in stabilizing inflation in the European Monetary Union during the energy crisis

Monetary policy, together with fiscal
policy, are key policies in stabilizing economies
from shocks that come from offers and demands.
The monetary policy, with the application of its
instruments and channels of transmission, among
other things, aims to maintain a stable level of
prices, that is, a low level of inflation by
permanently creating targeted measures and
establishing a target corridor in which inflation
should move towards. The emergence of the
Corona crisis in 2020 indirectly through the
governments' health care measures, which
included the ban on movement, implied the
disruption of global supply chains, the reduction of
aggregate demand, and the depletion of state
budgets, in addition to this, the beginning of the
Russian-Ukrainian conflict and the imposition of
sanctions on banning trading in Russian oil and
gas on the world stock exchanges caused a rapid
increase in the prices of energy in Europe, this
reflected in the prices of almost all products and
services,
and the same resulted in a
characteristically high or double-digit inflation
rate within the Eurozone. The subject of the
research is the analysis of the role of monetary
policy in the stabilization of inflation in the
Eurozone through monetary measures, instruments
of the European Central Bank and transmission
channels. The scientific goal of the research is to
examine the impact of monetary measures on the
stabilization of inflation in the Eurozone by
applying a theoretical-methodological basis and
quantitative analysis. From the research it can be
concluded that with a high inflation rate, the
monetary policy has a significant role in creating
policies and measures for stabilization and
reduction of inflation precisely because a
significant correlation has been identified between
inflation and the variables that can be affected by
monetary measures, it can also be concluded that
the
Eurozone, even though known as a
complicated optimal currency area due to the fact
that different countries are in different business
cycles, the ECB's measures had a stabilizing role
and contribute to the reduction of inflation and
macroeconomic stability as a whole.