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New perspectives on monetary policy

Author

Listed:
  • Moritz Schularick

    (University of Bonn and Sciences Po, Paris)

Abstract

This paper presents and discusses new perspectives on the framework of monetary policy that challenge the current paradigm: (i) The development of heterogeneous agent models in which “divine coincidence†no longer holds and trade-offs between inflation and output stabilization arise; (ii) New theoretical and empirical evidence on the distributional effects of conventional and unconventional monetary policy; (iii) Evidence that stabilization policy by central banks invites more leverage, risktaking and a rising exposure of intermediaries to the systematic risks that central banks insure, which in turn increases financial and economic fragility.

Suggested Citation

  • Moritz Schularick, 2022. "New perspectives on monetary policy," Working Papers 3, Forum New Economy.
    • Handle: RePEc:agz:wpaper:2203
    as

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    File URL: https://newforum.org/wp-content/uploads/2022/01/FNE-WP03-2022.pdf
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    References listed on IDEAS

    as
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    6. Benjamin Moll, 2020. "Comment on "Sources of US Wealth Inequality: Past, Present, and Future"," NBER Chapters, in: NBER Macroeconomics Annual 2020, volume 35, pages 468-479, National Bureau of Economic Research, Inc.
    7. Adam, Klaus & Tzamourani, Panagiota, 2016. "Distributional consequences of asset price inflation in the Euro Area," European Economic Review, Elsevier, vol. 89(C), pages 172-192.
    8. Rigobon, Roberto & Sack, Brian, 2004. "The impact of monetary policy on asset prices," Journal of Monetary Economics, Elsevier, vol. 51(8), pages 1553-1575, November.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    monetary policy; heterogeneous agent model; inequality; asset prices; Central Banks´ mandate; stabilization policy;
    All these keywords.

    JEL classification:

    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E64 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Incomes Policy; Price Policy
    • H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt

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