"Front-loading" monetary tightening: pros and cons

Paolo Cavallino, Giulio Cornelli, Peter Hördahl and Egon Zakrajšek ()

No 63, BIS Bulletins from Bank for International Settlements

Abstract: In response to the surge in inflation globally, central banks have engaged in the most synchronised and rapid monetary tightening in 50 years. Parsing the evidence from 11 advanced economies since 1970 indicates that "front-loading" of interest rate hikes is successful in countering inflation, even in the face of large and persistent inflationary shocks. Still, front-loaded monetary policy tightening may carry risks to financial stability, especially in an environment of high private and public debt levels or potential fragility in market liquidity.

Pages: 9 pages
Date: 2022-12-09
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.bis.org/publ/bisbull63.pdf Full PDF document (application/pdf)
https://www.bis.org/publ/bisbull63.htm (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bis:bisblt:63

Access Statistics for this paper

More papers in BIS Bulletins from Bank for International Settlements Contact information at EDIRC.
Bibliographic data for series maintained by Martin Fessler ().