Reforming monetary policy for a normal future

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Chapter 6 in After Brexit, What Next?, 2020, pp 119-126 from Edward Elgar Publishing

Abstract: We set out new work on how monetary policy can, once it recovers effectiveness, more effectively target Nominal GDP than simply inflation, in the context of n economy where price-setting durations vary in response to inflation. Such a new central bank targeting set-up, backed up by a fiscal commitment to prevent a Zero Lower Bound, will deliver a much more stable economy, making the whole programme of direct control of bank balance sheets and ‘prudential’ intervention redundant. Under this monetary policy the economy should behave more like it did under the gold standard, with prices achieving long run stability, and output avoiding large cyclical swings.

Keywords: Economics and Finance; Environment; Law - Academic; Politics and Public Policy (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (2)

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