Financial Stability News

News about financial stability and central banking

Monetary Policy is Difficult

Interesting policy note by David Laidler, Canadian monetary economist and associate of the Howe Institute (from July). He writes on the diffuse concept of the “natual rate” and argues that more weight should be put on informal factors in setting interest rate policy. There is no signs of inflation around the corner, and consequently less weight should be put on the more rigorous monetary policy models where the natural rate place a pivotal role.

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