Monetary policy without interest rates. The French experience with quantitative controls (1948 to 1973)

The global crisis has fostered a debate about the use of quantitative instruments by central banks. This issue of Rue de la Banque looks at French monetary policy, during the period known as the Trente Glorieuses, when the central bank relied on quantitative instruments rather than on interest rates. The specific effect of quantitative controls on money and credit has to be taken into account in order to identify correctly the stance of monetary policy. Using a narrative approach to assess the monetary policy stance suggests that quantitative instruments can have substantial effects. This experience shows that one major issue for unconventional policies based on quantitative controls is how to keep monetary policy effective without making central bank instruments and announcements excessively complex.