Monetary Policy Strategy: Lessons from the Crisis
TL;DR: In this paper, the authors examine what we have learned and how we should change our thinking about monetary policy strategy in the aftermath of the 2007-2009 financial crisis and how much of the science of monetary policy needs to be altered.
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Abstract: This paper examines what we have learned and how we should change our thinking about monetary policy strategy in the aftermath of the 2007-2009 financial crisis. It starts with a discussion of where the science of monetary policy was before the crisis and how central banks viewed monetary policy strategy. It will then examine how the crisis has changed the thinking of both macro/monetary economists and central bankers. Finally, it looks how much of the science of monetary policy needs to be altered and draws implications for monetary policy strategy.
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Citations
Monetary stimulation, bank relationship and innovation: Evidence from China
TL;DR: In this article, the authors used China's four trillion yuan stimulus package of 2008 (4 Trillion Plan) as an exogenous shock, and found that monetary stimulation could benefit the real economy to some extent.
Oil prices, policy uncertainty and asymmetries in inflation expectations
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TL;DR: In this paper, the authors investigate the possible asymmetric response of inflation expectations to oil price and policy uncertainty shocks and find that a positive increasing oil price has greater effect on inflation expectations than a negative decreasing oil price shock.
Lessons for Monetary Policy: What Should the Consensus Be?
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On the Performance of Monetary Policy Committees
TL;DR: In this article, the influence of the biographical experience of monetary policy committee members on their performance in managing inflation and output volatility was examined, and it was shown that in crisis times, a smaller committee is more efficient, with a positive role for committee members coming from academia, central banks and the financial sector.
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