Should-Read: Ben Bernanke: Monetary Policy in a New Era

Should-Read: If only this Ben Bernanke (2017) (and Paul Krugman (1998)) could have had the ear of some central bank leader over 2006-2014!

Ben Bernanke: Monetary Policy in a New Era: “Outside of making a stronger case for proactive fiscal policies, there are two broad possibilities…

…Monetary policymakers could make greater use of new tools… both forward guidance and quantitative easing are potentially effective supplements to conventional rate cuts, and that concerns about adverse side effects (particularly in the case of quantitative easing) are overstated. These two tools can thus serve to ease the ZLB constraint in the future…. A second broad response to the problem is to modify the overall policy framework…. I propose… a “temporary price-level target” that kicks in only during periods in which rates are constrained by the ZLB…