Benoît Cœuré EUdebates: What does Europe do -Monetary Policy. The challenges ahead скачать в хорошем качестве

Benoît Cœuré EUdebates: What does Europe do -Monetary Policy. The challenges ahead

Monetary policy: the challenges ahead - Remarks by Benoît Cœuré. Institutions dedicated to serving the public good must look to the past to learn from experience; and look to the future to prepare, as best they can, for the trials that might lie ahead. https://www.eudebates.tv/tag/monetary... The 20th anniversary of Economic and Monetary Union (EMU) offers an opportunity to apply such a perspective to the monetary policy of the European Central Bank (ECB): to evaluate its accomplishments and to learn the lessons that can improve the conduct of its policy in the future. https://www.eudebates.tv/tag/european... Speech by Benoît Cœuré, Member of the Executive Board of the ECB, at the ECB colloquium on “Monetary policy: the challenges ahead” held in his honour Monetary policy: lifting the veil of effectiveness The starting point for my remarks this morning is people’s sense of frustration and their criticism of central banks for failing to deliver inflation consistent with their aim. This criticism has taken different forms in society. Professional observers and financial market participants often criticise the inadequate size of our actions and question the effectiveness of our instruments. Private citizens criticise the type of instruments we use – in particular asset purchases and negative interest rates – and the side effects they associate with them. The use of these instruments has caused persistent mistrust. While three in four euro area citizens think the single currency is good for the European Union and two in three think it is good for their country, less than half of citizens trust the ECB.[2] In my remarks this morning, I would like to make two points that speak to these concerns. The first is that there is no contradiction between inflation being low and monetary policy being effective. Central banks have achieved great success in recent years. Their achievements, however, and this will be my second point, are of little avail if the public does not recognise or understand them. I will argue that this “veil of effectiveness” creates enormous challenges for the credibility and acceptance of central banks – challenges which can only be overcome by revisiting the appropriateness of four key components at the heart of our current monetary policy frameworks: how we define price stability, how we measure inflation, how we evaluate the credibility of our intentions and the range of counterparts through which we implement monetary policy. -- The colloquium honoured Executive Board member Benoît Cœuré’s legacy by reflecting on how bond markets and new challenges such as technological innovation and globalisation affect monetary policy. #eudebates #ECB #Lagarde #Guindos #MonetaryPolicy #Economy #Growth #event The 20th anniversary of Economic and Monetary Union (EMU) offers an opportunity to look back on the ECB’s record and learn lessons that can improve the conduct of policy in the future. This paper charts the way the ECB has defined, interpreted and applied its monetary policy framework – its strategy – over the years from its inception, in search of evidence and lessons that can inform those reflections. Our “Tale of Two Decades” is largely a tale of “two regimes”: one – stretching slightly beyond the ECB’s mid-point – marked by decent growth in real incomes and a distribution of shocks to inflation almost universally to the upside; and the second – starting well into the post Lehman period – characterised by endemic instability and crisis, with the distribution of shocks eventually switching from inflationary to continuously disinflationary. We show how the most defining element of the ECB’s monetary policy framework, its characteristic definition of price stability with a hard 2% ceiling, functioned as a key shockabsorber in the relatively high-inflation years prior to the crisis, but offered a softer defence in the face of the disinflationary forces that hit the euro area in its aftermath. The imperative to halt persistent disinflation in the post-crisis era therefore called for a radical, unprecedented policy response, comprising negative policy rates, enhanced forms of forward guidance, a large asset purchase programme and targeted long-term loans to banks. We study the multidimensional interactions among these four instruments and quantify their impact on inflation and economic activity.