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Re-Normalize, Don't New-Normalize Monetary Policy

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  • John B. Taylor

Abstract

In this paper I argue that central banks should re-normalize monetary policy, including the de facto independence of policy, rather than new-normalize policy to some so called new normal. I explain his view and show that it follows from a review of the actual practice of monetary policy in recent years. I also consider some objections that might be raised to this position. I focus mainly on the United States and go back to the time before the recent financial crisis.

Suggested Citation

  • John B. Taylor, 2014. "Re-Normalize, Don't New-Normalize Monetary Policy," Economics Working Papers 14109, Hoover Institution, Stanford University.
    • Handle: RePEc:hoo:wpaper:14109
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    References listed on IDEAS

    as
    1. John B. Taylor, 2013. "Monetary Policy during the Past 30 Years with Lessons for the Next 30 Years," Cato Journal, Cato Journal, Cato Institute, vol. 33(3), pages 333-345, Fall.
    2. Christopher Crowe & Ellen E. Meade, 2007. "The Evolution of Central Bank Governance around the World," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 69-90, Fall.
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    Cited by:

    1. Shodipe Oladimeji T. & Shobande Olatunji Abdul, 2021. "Monetary Policy Dynamics in the United States," Open Economics, De Gruyter, vol. 4(1), pages 14-30, January.

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