Jeffrey Frankel, 29 May 2008

Low inventory levels might seem to belie the theory that soaring commodity prices are attributable to low interest rates. In this column, Jeffrey Frankel defends his argument, pointing to production decisions and cross-country comparisons.

Michael Orlando, 24 May 2008

The financial crisis has put the US Federal Reserve’s performance under the spotlight. As the United States reassesses its financial regulatory system, this column makes the case for central bank independence.

Richard Baldwin, 08 May 2010

This column, first posted 17 May 2008, reviews Willem Buiter's analysis of why the ECB is so hesitant to buy debt. Central banks can go broke – and some in developing countries have done so recently. The ECB is now lending against dubious collateral. An ECB recapitalisation seems unthinkable at the moment, but that’s why it is a good time to think the unthinkable. Willem Buiter considers the question at length in CEPR Policy Insight No. 24 and argues that Eurozone fiscal authorities should, ASAP, agree on a formula for fiscal burden-sharing should an ECB recapitalisation ever be necessary.

Stephen Cecchetti, 10 April 2008

The nature of the ongoing financial turmoil that began in August 2007 has rendered traditional monetary policy responses ineffective. This column summarises the US Federal Reserve’s response to the crisis.

Jon Faust, 31 January 2008

The US Federal Reserve makes monetary policy based on necessarily imperfect economic forecasts. Recent research shows that the Fed is quite adept at assessing current economic conditions, but forecasting the future remains disappointingly difficult.

Michael Woodford, 17 January 2008

Central banks have experimented with ‘forward guidance’ – sending signals about the future path of interest rate policy more than just one decision ahead – as a way of stabilizing medium-to-longer run expectations. Here is a discussion of the phenomenon and some ideas on how the Fed could improve its signalling.

Michael Woodford, 08 January 2008

The new strategy is not ‘stealth inflation targeting,’ but it matters for the Fed’s own deliberations. Here the world’s leading monetary theorist argues that forcing FOMC members to look years ahead will move policy towards a coherent strategy, away from a sequence of short-term decisions -- highly desirable since the anticipation of policy matters to its effectiveness.

Gilles Saint-Paul, 06 December 2007

Many observers call for US interest rate cuts to avoid a recession, but this is likely to perpetuate the current imbalances in the US economy. The US probably needs a recession to get the required correction in house prices and consumer spending. The Fed should signal its intention to hang tough and start thinking about how big a fall in GDP it will tolerate before intervening.

Stephen Cecchetti, 13 August 2007

Here are the basic how's and why's of what the Fed has been doing to calm financial markets.

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