Monetary Policy Strategy: Lessons from the Crisis
ثبت نشده
چکیده
This paper examines what we have learned about monetary policy strategy and considers how we should change our thinking in this regard in the aftermath of the 2007-09 financial crisis. It starts with a discussion of where the science of monetary policy stood before the crisis and how central banks viewed monetary policy strategy. It then examines how the crisis has changed the thinking of both macro/monetary economists and central bankers. Finally, it looks at the extent to which the science of monetary policy needs to be altered and draws implications for monetary policy strategy.
منابع مشابه
Discussion of “Tactics and Strategy in Monetary Policy: Benjamin Friedman’s Thinking and the Swiss National Bank”
I am very happy to have the opportunity to participate in this conference and to honor Ben Friedman’s work. Ben deserves to be honored. He is not only a great economist; he is also a wonderful person. The Gerlach and Jordan (2011) paper is organized around a great idea, namely comparing Ben’s thinking about the tactics and strategy of monetary policy with the practical monetary policy of the Sw...
متن کاملLessons for Monetary Policy from the Euro-Area Crisis
The earlier 2007/2008 financial crisis generated the main lessons for monetary policy, notably that price stability does not necessarily guarantee financial stability. Nevertheless, the on-going Eurozone crisis has pointed to further lessons, notably that a single currency covering diverse states does need a Banking Union; and to problems of zero risk-weighting for sovereign debts. Without such...
متن کاملExit Strategies from The Global Crisis
While the form of crises may change, their essence remains the same (such as a cycle of abundant liquidity, rapid credit growth, and a low-inflation environment followed by an asset-price bubble). The current market turbulence began in mid-2000s when the US economy shifted to imbalanced both internal and external macroeconomic positions. We see two key causes of these problems – loose US moneta...
متن کاملMonetary Policy in Iran: The Challenge of Reducing Inflation
The conduct of monetary policy in an oil economy with a managed floating exchange rate regime can be challenging in an environment of fiscal dominance and incomplete transition to a market economy. The Five-Year Development Plans provide a natural benchmark against which to assess monetary policy performance in Iran. Price stability has proved elusive, with liquidity growth targets constan...
متن کاملFinancial Stability: an Emerging Markets Perspective
It is a pleasure to participate in this meeting and to speak about the lessons for monetary policy the current crisis is teaching us. The big difference between the current crisis with previous ones in emerging economies is that this time “it was not our fault.” The evidence on the performance of emerging countries facing an unprecedented global downturn shows that some lessons have been proper...
متن کامل