Forward guidance in the UK

Spencer Dale, James Talbot, 13 September 2013

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At its meeting on 1 August 2013, the Monetary Policy Committee (MPC) agreed to provide state-contingent forward guidance concerning the future conduct of monetary policy. The aim was to provide more information to help financial markets, households and businesses understand the conditions under which the current stance of monetary policy would be maintained.

Topics: Monetary policy
Tags: Bank of England, Central Banks, forward guidance, monetary policy

Tapering talk: The impact of expectations of reduced Federal Reserve security purchases on emerging markets

Barry Eichengreen, Poonam Gupta, 19 December 2013

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In May 2013, Federal Reserve officials first began to talk of the possibility of the US central bank tapering its securities purchases from $85 billion a month to something lower. A milestone to which many observers point is 22 May 2013, when Chairman Bernanke raised the possibility of tapering in his testimony to Congress.

Topics: Exchange rates, Monetary policy
Tags: capital controls, Capital inflows, currency war, emerging markets, exchange rates, Federal Reserve, Macroprudential policies, monetary policy, tapering

Monetary policy will never be the same

Olivier Blanchard, 27 November 2013

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Two weeks ago, the IMF organized a major research conference, in honour of Stanley Fischer, on lessons from the crisis. Here is my take. I shall focus on what I see as the lessons for monetary policy, but before I do this, let me mention two other important conclusions.

Topics: Monetary policy
Tags: global crisis, monetary policy

Economic uncertainty and the effectiveness of monetary policy

Knut Are Aastveit, Gisle James Natvik, Sergio Sola, 19 October 2013

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Since the onset of the “Great recession”, economists have struggled to explain why the recovery has been so slow, despite the many policy measures that have been passed to re-invigorate economic activity. One candidate explanation that several have pointed to, for instance Baker, Bloom, Davis and Van Reenen (2012), is economic uncertainty.

Topics: Monetary policy
Tags: Great Recession, monetary policy, uncertainty

The impact of liquidity regulation on monetary-policy implementation

Clemens Bonner, Sylvester Eijffinger, 14 October 2013

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In response to the recent financial crisis, the Basel Committee on Banking Supervision has drafted a new regulatory framework (henceforth Basel III) with the aim to achieve a more robust banking system. While it also tightens the existing requirements for capital, the proposal stands out as it is the first to attempt harmonised liquidity regulation across the globe.

Topics: Financial markets, Monetary policy
Tags: BASEL III, financial regulation, liquidity, liquidity coverage ratio, monetary policy

International cooperation and central banks

Harold James, 8 October 2013

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Tackling the aftermath of a major financial crisis, the origins of which lie in ‘global imbalances’ and whose transmission mechanisms are cross-national, seems prima facie to demand more substantial and institutionalised cooperation. However, in the five years since the collapse of Lehman Brothers, visions of what central banks can and should do have changed profoundly.

Topics: Global crisis, International finance
Tags: Central Banks, Eurozone crisis, global crisis, global imbalances, monetary policy, policy coordination

Unconventional monetary policies revisited (Part II)

Biagio Bossone, 5 October 2013

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Unconventional monetary policies: From quantitative easing to debt monetisation

Topics: Macroeconomic policy, Monetary policy
Tags: central-bank independence, forward guidance, helicopter money, monetary policy, quantitative easing

Unconventional monetary policies revisited (Part I)

Biagio Bossone, 4 October 2013

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The 2007 financial crisis and the following economic slump led central banks in advanced economies to undertake unconventional monetary policies.1 The crisis evolution, especially in debt-ridden European nations, and the limits of the unconventional approaches adopted, triggered proposals for new heterodox responses.

Topics: Monetary policy
Tags: helicopter money, monetary policy, QE

Independent monetary policies, synchronised outcomes

Espen Henriksen, Finn Kydland, Roman Šustek, 2 October 2013

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The recession in the Eurozone has given new life to optimal-currency-area thinking. The argument goes that the disadvantages of a single currency come from the loss of flexibility and ability to use monetary policy to respond to “asymmetric shocks” (Krugman and Obstfeld 2009).

Topics: Exchange rates, Monetary policy
Tags: capital controls, Central Banks, EMU, exchange-rate policy, inflation, monetary policy

Is there a dilemma with the Trilemma?

Michael W Klein, Jay C. Shambaugh , 27 September 2013

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In the Handbook of Safeguarding Global Financial Stability, the chapter “Capital Mobility and Exchange Rate Regimes” begins “Forced to state all the insights of international macroeconomics while standing on one leg, one could do worse than raise a foot off the ground and say something like:

Topics: Exchange rates, Monetary policy
Tags: capital controls, exchange-rate policy, global crisis, monetary policy

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