Monetary Policy 1.0
It was only just a few years ago that monetary policy experts had universally converged on a small set of central bank principles, Monetary Policy 1.0. These simple principles were based firmly on a central bank’s credibility and the trust the central bank inspired in businesses, households and financial market. However, some prominent economic policymakers now openly question some of the principles of Monetary Policy 1.0, and in turn wish to make a new, more fashionable Monetary Policy 2.0. We should all be concerned at this turn of events.
It was only just a few years ago that monetary policy experts had universally converged on a small set of central bank principles, Monetary Policy 1.0. These simple principles were based firmly on a central bank’s credibility and the trust the central bank inspired in businesses, households and financial market. However, some prominent economic policymakers now openly question some of the principles of Monetary Policy 1.0, and in turn wish to make a new, more fashionable Monetary Policy 2.0. We should all be concerned at this turn of events.
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