Central Banking After the Crisis: No Return to Past Certainties
Business Economics, 2015, vol. 50, issue 3, 114-127
Before the 2008 crisis, macroeconomic theory and central bank practice regarded low and stable inflation to be a policy objective that was sufficient to ensure macroeconomic and financial stability. There was little concern with the details of the financial system or balance sheet aggregates. This article makes the case that these details are important and that monetary and macroprudential policy must control both the quantity and allocation of credit. This entails a revision of conventional monetary theory as well as policy, particularly to explain the paradox of the precrisis situation of so much credit and so little inflation. The particular role of real estate investment is described as a source of financial instability that can only be addressed by nuanced monetary and macroprudential policy.
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.palgrave-journals.com/be/journal/v50/n3/pdf/be201519a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/be/journal/v50/n3/full/be201519a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pal:buseco:v:50:y:2015:i:3:p:114-127
Ordering information: This journal article can be ordered from
Access Statistics for this article
Business Economics is currently edited by Charles Steindel
More articles in Business Economics from Palgrave Macmillan, National Association for Business Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla ().