Prachi Mishra, 16 June 2016

All monetary policies have external spillover effects. However, the domestic mandates of most central banks may not legally allow them to take spillovers into account, and may force them to undertake aggressive policies so long as they have some small positive domestic effect. This column looks at the rules of the game for responsible policy in such a context. It proposes a ‘traffic light’ system to identify policies that should be encouraged by the international community, policies that should be used temporarily and with care, and policies that should be avoided at all costs.


Exchange rates movements are again attracting a lot of attention as a focal point in the policy debate. Prolonged recession following the global financial crisis has pushed most advanced economies into liquidity traps where domestic monetary policy is severely limited. The exchange rate offers an alternative option for boosting aggregate demand in a liquidity trap. However, the exchange rate channel may have global repercussions through spillover effects on international goods and financial markets. Emerging market policymakers, in particular, have raised warnings about excessive exchange rate movements arising from advanced economy stimulus. A further risk arises from the exchange rate implications of US monetary policy `normalization’. This conference hopes to bring together new empirical and theoretical research on all aspects of exchange rates, their role in domestic macroeconomic policy as well as the global trade and financial system.


The Bank of England is organising a conference, in association with The Economic Journal, which will bring together researchers from both the international academic and policy communities to discuss what has been learned about Quantitative Easing (QE) and other unconventional monetary policies during the financial crisis. The intended focus of the conference will be mainly on the UK’s recent experience, but papers with a broader international or historical perspective are also welcome. Accepted papers can be submitted to The Economic Journal for possible publication in a special Features issue. To aid researchers, the Bank has made available a unique dataset covering the recent UK QE period.
SUBMISSION DEADLINE: Please send a brief description of your proposed paper by 1 February, 2011, by emailing [email protected]. Papers for consideration should be sent to the same address in PDF format by 1 July, 2011. For further details, see the conference website.


CEPR Policy Research