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.

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Topics:  Monetary policy

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

Publish or be damned – or why central banks need to say more about the path of their policy rates

Richard Barwell, Jagjit Chadha 31 August 2014

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The central banking community has made significant steps to improve its communication strategy since the days of myth and mystique criticised by Alan Blinder in 1998:

“Greater openness is not a popular case in central banking circles, where mystery is sometimes argued to be essential to effective monetary policy…[but] a more open central bank, by contrast, naturally conditions expectations by providing the markets with information about its own view of the fundamental forces guiding monetary policy.” 

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Topics:  Monetary policy

Tags:  Bank of England, forward guidance, unconventional monetary policy

Enhancing the transparency of the Bank of England’s Inflation Report

Jack McKeown, Lea Paterson 18 July 2014

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Nearly two decades ago, Alan Blinder used the Lionel Robbins lecture series at the London School of Economics to set out what, at the time, was a minority view on central bank communication – that greater transparency was a good thing, and would help central banks do a better job.1 That view is now widely accepted in mainstream macro thinking, and the past 20 years have seen a transformation in the way central banks communicate.

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Topics:  EU institutions Macroeconomic policy

Tags:  Bank of England, Inflation Report

What are the macroeconomic effects of asset purchases?

Martin Weale, Tomasz Wieladek 10 June 2014

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After policy rates fell close to zero in response to the global financial crisis of 2008-09, the scope for further conventional monetary policy easing was exhausted. As a result, both the Bank of England and the Federal Reserve embarked on large-scale asset purchases of government and financial securities (see Figures 1 and 2).

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Topics:  Monetary policy

Tags:  inflation, Federal Reserve, Phillips curve, Bank of England, quantitative easing, unconventional monetary policy, output

A well-designed sterling union will be needed if Scotland votes for independence

Oliver Harvey, George Saravelos 28 May 2014

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The currency options of an independent Scotland have become a crucial point of contention for both sides ahead of the September 2014 referendum. However, the debate has so far focused on the suitability of different regimes based on the optimal currency area framework or fiscal implications (Armstrong 2013). There has been little focus on the practical issues involved. This is problematic because a breakup of the sterling area would be historically unprecedented and uniquely complex.

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Topics:  Europe's nations and regions Monetary policy

Tags:  monetary independence, currency union, Bank of England, Currency unions, Scotland, sterling, Scottish independence

Monetary policy in the UK: Time for change?

David Cobham 16 September 2013

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Before the Global Crisis it seemed as though the problems of monetary policy in the UK had been solved:

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Topics:  Monetary policy

Tags:  inflation targeting, Bank of England, UK, QE

Mark Carney and first impressions in monetary policy

Stephen Hansen, Michael McMahon 11 August 2013

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Much of modern monetary policy is concerned with managing inflation expectations. The establishment of independent central banks, the move to inflation targeting, and the more recent use of forward-guidance rules by some central banks all reflect the importance of managing inflation expectations. The change of senior central bank personnel, such as the appointment of a new Chairperson or Governor, is often a period of particular importance for anchoring inflation expectations.

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Topics:  Monetary policy

Tags:  Bank of England, Mark Carney, Hawk, Dove

Currency stabilisation and asset-price anchors: An examination of medieval monetary practices with some implications for modern policy

Anthony Hotson 23 April 2013

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Mints as off-balance-sheet intermediaries

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Topics:  Economic history

Tags:  Bank of England, gold standard, Mint, bullion, consumer price index

Helicopter money

Stephen Grenville 24 February 2013

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In the current debate about monetary policy, two terms are bandied about to the detriment of clarity: ‘printing money’ and ‘helicopter money’ (Sinn 2011).

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Topics:  Macroeconomic policy Monetary policy

Tags:  fiscal policy, Bank of England, quantitative easing, QE, Overt Monetary Finance

Monetary targetry: Might Carney make a difference?

Charles A.E. Goodhart, Melanie Baker, Jonathan Ashworth 22 January 2013

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The economic recovery from the 2008/9 crisis has been depressingly slow in the UK, as in many other developed countries. Further fiscal expansion is constrained by concerns about the extraordinary (for peace-time) scale of the public sector deficit and rise in the debt/GDP ratio. Hence politicians, and many other commentators, are looking to monetary policy to play an even more aggressive role in getting us out of our present stagnation.

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Topics:  Monetary policy

Tags:  Bank of England, nominal GDP targeting

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