Exit Strategy

Alan Blinder, Thomas Jordan, Donald Kohn, Frederic Mishkin 10 October 2013



Table of Contents

List of Conference Participants


Introduction and Acknowledgements
Charles Wyplosz

PART I: Exit to What?

1 Exit to What? The Status Quo Ante or Some New Normal?

Alan S. Blinder

1.1 Inflation targeting
1.2 Balance sheets and novel instruments
1.3 Central bank communication
1.4 Macroprudential concerns
1.5 International cooperation
1.6 Questions for discussion


2 Exit to What?

Frederic S. Mishkin

2.1 Introduction
2.2 Should inflation targeting be abandoned?
2.3 Should central banks engage in policies that are directed at
financial stability?
2.4 Should non-conventional monetary policy be kept in central bank
toolkits and how does this affect central bank communication?
2.5 Concluding remarks


3 Discussion: The New Normal

3.1 Comments by Julian Callow
3.2 Comments by Benoît Coeuré
3.3 Comments by Lucrezia Reichlin
3.4 General discussion

PART II: How to Exit?

4 When and How to Exit: Issues Related to the Transition

Donald Kohn

4.1 Introduction
4.2 When to exit: Under what circumstances should policy change?
4.3 How to exit: How should tools be deployed to exit unconventional
policies and will they be effective?
4.4 What are the potential implications of exit for financial stability
and what should be done to mitigate any risks?
4.5 What are the potential implications of exit for the fiscal condition of
the government in general, and the central bank in particular?
4.6 Transparency and plans
5 Discussion: How to Prepare for Exit and What Order of Exit?
5.1 Comments by Lorenzo Bini-Smaghi
5.2 Comments by Kiyohiko Nishimura
5.3 Comments by Huw Pill
5.4 General discussion

PART III: Exit to a New Macroprudential Framework

6 Exit to a New Macroprudential Framework: The Swiss Approach

Thomas J. Jordan

6.1 Introduction
6.2 Monetary policy, financial stability and the involvement of central
6.3 Current instruments
6.4 New instruments and a new institutional framework
6.5 Swiss governance
6.6 Importance of careful but determined approach
6.7 Swiss experience
6.8 Conclusions

Gordon S. Rentschler Memorial Professor of Economics and Public Affairs at Princeton University

Chairman of the Governing Board, Swiss National Bank

Member of the Financial Policy Committee, Bank of England

Alfred Lerner Professor of Banking and Financial Institutions, Columbia Business School


CEPR Policy Research