In November 2021, after being a guest on Josh Dukelow’s Fresh Take program, I posted two related pieces: one on whether inflation was temporary or not and a second on the role of monetary policy. It’s time for an update, especially since the inflation rate has risen significantly since November 2021 (see the below chart) … More Sustained Inflation: Is a Monetary Policy Response Needed?
Economists have been asking this question for well over a century (or perhaps since Sweden established the Riksbank in 1668.) The answers have changed over time; however, in the 1990s, economists seemed to have reached a consensus that price stability is the primary objective, if not the sole objective, for central banks. Clearly, the financial … More What Should Central Banks Do? Central Bankers Volcker, Mishkin, Rajan, and King Provide Excellent Guidance.
This commentary was originally posted on July 25th, 2016. Central bankers in all major developed economies have adopted NIRP, ZIRP, or near ZIRP policies. The Bank of Japan and the European Central Bank now “offer” negative interest rates (NIRP) on deposits and project to do so for the foreseeable future. The Bank of England and […]
… More Monetary Policy in an Age of Radical Uncertainty (reposting)