Evolution or revolution?
Rethinking macro stabilization Back to the future
By: Olivier Blanchard, Lawrence Summers – PIIE, Harvard University
… the inflation-centric rationale for CBI looks a bit outdated in a world in which inflation and nominal interest rates are too low, rather than too high; and in which politicians have criticized central banks for being too expansionary rather than not expansionary enough. Indeed, the same logic that holds that CBI is necessary to avoid excess inflation can be turned on its head, to imply that CBI is a barrier to the fiscal-monetary coordination needed to combat deflation.
Monetary policy in a new era
By: Ben Bernanke – Brookings
There have been many strong recent influences on our perspectives of fiscal policy. These include a largely negative experience with fiscal rules, the growing challenge of fiscal sustainability in economies with aging populations, a declining excitement about the possibility of expansionary fiscal contractions, our experience in dealing with the global financial crisis, and a prolonged period of very low government interest rates.
Fiscal Policy
By: Alan J. Auerbach – Berkeley
The financial system is dynamic and adaptive. So any financial regulatory regime will itself need to be adaptive if it is to contain risk within this system. In the terms used by Greenwood et al (2017), resilience needs to be “dynamic”. As past evidence has shown, too rigid a regulatory system will soon become otiose. And there are already calls, in some quarters and in some countries, for a rethink and rewrite of regulatory rules on which the ink is barely dry. This poses both opportunities and threats.
Rethinking Financial Stability
By: Andrew G Haldane – Bank of England
