Policy Workshop, June 29, 2009 — abstract

Policy Workshop

The Future of Monetary Policy: Traditional
Concepts Meet New Challenges

June 29, 2009

Abstract

The financial crisis and the worldwide recession have severely challenged monetary policy. Around the globe, central banks are now heavily engaged in fighting the slump and preventing financial systems to collapse. In a couple of months, the top priority of central bankers has changed from taming inflation to preventing deflation and financial collapse.

The present mainstream framework for thinking of monetary policy is the inflation targeting paradigm. Central banks around the globe have been adopting variants of this framework in recent years. What does this framework imply for central bank action, what are its assumptions and implications? What guidance does it give for central bankers in the present situation? And how have central banks actually reacted to the crisis? Has it been useful for delivering macroeconomic stability or has itself been a cause of the present turmoil? What elements will new paradigms contain in order to meet the challenges for central banking?

The Speakers will examine the strategies and reactions of the European Central Bank, the Federal Reserve and the Bank of England. In addition, there will be a briefing on policy reactions by the Central Banks of China and Vietnam - and an opportunity to discuss new monetary policy concepts in general.