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The Difficulty with Central Bankers

Thursday, 7 January 2016
To non-economists — and, sadly, for that matter, economists under the age of 50 — the name Harry Johnson probably doesn't have any particular significance. That is unfortunate. Johnson was a colossus in economics for roughly a quarter century from, say, the mid-1950s to the late 1970s.

Canada’s Stephen Poloz has no time for Summers’s theory of secular stagnation

Friday, 11 December 2015
Bank of Canada Governor Stephen Poloz started 2015 with a surprise interest-rate cut. He followed with a second quarter-point reduction six months later. For some, that might have been enough noise-making for one year. Not Poloz. He used his final speech of the year to take a shot at Harvard University’s Lawrence Summers, one the world’s most prominent thought leaders.

Much Ado about Nothing? The RMB's Inclusion in the SDR Basket

Friday, 4 December 2015
The International Monetary Fund recently concluded its quinquennial review of the composition of the Special Drawing Right (SDR), accepting the Chinese currency into the SDR basket alongside four major international currencies — the US dollar, the euro, the British pound and the Japanese yen. The Chinese government has spent a great deal of energy and political capital to achieve this outcome. This policy paper explains China’s interest in this seemingly exotic and technical pursuit, identifying the political and economic motivations underlying this initiative.

Fallen Shibboleths and Victorian Virtues

Tuesday, 10 November 2015
I was a discussant at a CIGI-Institute for Policy Dialogue conference on sovereign debt restructuring at Columbia University in September hosted by Joe Stiglitz and Domenico Lombardi. In my remarks on one of papers, I identified a key challenge in the global economy: insufficient global aggregate demand that generates deflationary pressures.

Sustainable Climate Finance: From Discussion to Action

Friday, 9 October 2015
In a packed theatre in the middle of Lima at the 2015 International Monetary Fund (IMF) and World Bank Group (WBG) Annual Meetings in Peru, Christine Lagarde (Managing Director of the IMF) declares, “The threat is real!” at the flagship conversation on climate change.

The Global Monetary and Financial Policy Experiment

Friday, 9 October 2015
At the height of the global financial crisis, monetary policy entered unchartered waters as it attempted to prevent the collapse of the financial system and support liquidity in the banking system. It has now been seven years that the central banks of the world’s major economies have been intervening in financial markets using unconventional monetary policies and it remains uncertain how, at what pace and when the ‘normalization’ of monetary policy should occur.

Global policy makers have a new enemy: Stagnation

Thursday, 8 October 2015
CIGI Senior Fellow Kevin Carmichael reports from on the ground in Lima, Peru following the press conference held on October 8, 2015 with the International Monetary Fund Managing Director Christine Lagarde and World Bank President Jim Yong Kim.

The latest threat to inflation targeting is inflation data

Thursday, 24 September 2015
Inflation targeting is an extremely resilient policy. It survived an attempted lynching after the financial crisis, when a mob of economists such as David Blanchflower blamed it for the Great Recession. There was some introspection, but none of the method’s adherents changed course. In fact, the United States Federal Reserve made its inflation target more explicit. India this year adopted one.

Two Key Words in China’s Currency Policy: Control and Balance

Monday, 31 August 2015
The past few weeks have been turbulent for China’s economy, to say the least, with its currency, the renminbi (RMB) — also known as the yuan — declining sharply, nearly two percent against the dollar on August 11, the biggest one-day change in the currency in 20 years. In total, it experienced a 4.4 percent devaluation from August 11 to August 13, shocking the global financial markets. The world interpreted China's move as a currency war or currency manipulation, prompting the devaluation of currencies in many emerging markets.

The Export-Driven Model of Economic Growth is Dead

Monday, 31 August 2015
India’s central bank governor upset some people in New Delhi when he first suggested that Prime Minister Narendra Modi was wrong if he thought he could load his country out of poverty by applying China's growth model.
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