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The Evolution of Theory and Practice of Monetary Policy as a Result of the Global Economic Crisis

Author

Listed:
  • Drobyshevsky, S.

    (Gaidar Institute for Economic Policy, Moscow, Russia
    Center of Macroeconomic Research, RANEPA, Moscow, Russia)

  • Trunin, P.

    (Gaidar Institute for Economic Policy, Moscow, Russia
    Center of Central Banks Studies, RANEPA, Moscow, Russia)

Abstract

The authors analyze the evolution of global ideas on the optimal monetary policy in the aftermath of the global economic crisis. The authors provide the basic principles of the pre-crisis monetary policy and show that after the crisis, they have not changed fundamentally. It is also argued that some lessons of the global crisis are relevant for the monetary policy of the Bank of Russia, as well as some of the classic principles of effective monetary policy.

Suggested Citation

  • Drobyshevsky, S. & Trunin, P., 2014. "The Evolution of Theory and Practice of Monetary Policy as a Result of the Global Economic Crisis," Journal of the New Economic Association, New Economic Association, vol. 24(4), pages 141-158.
  • Handle: RePEc:nea:journl:y:2014:i:24:p:141-158
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    References listed on IDEAS

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    1. Ben S. Bernanke & Mark Gertler, 2001. "Should Central Banks Respond to Movements in Asset Prices?," American Economic Review, American Economic Association, vol. 91(2), pages 253-257, May.
    2. Evgeny Gorunov & Pavel Trunin, 2013. "The Bank of Russia at the Crossroads: does the monetary policy needs easing," Working Papers 0067, Gaidar Institute for Economic Policy, revised 2013.
    3. Jens H. E. Christensen & Jose A. Lopez & Glenn D. Rudebusch, 2014. "Do Central Bank Liquidity Facilities Affect Interbank Lending Rates?," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 32(1), pages 136-151, January.
    4. Svensson, Lars E O, 1997. "Optimal Inflation Targets, "Conservative" Central Banks, and Linear Inflation Contracts," American Economic Review, American Economic Association, vol. 87(1), pages 98-114, March.
    5. Vedev, Alexey & Drobyshevskiy, Sergei & Sinelnikov-Murylev, Sergei & Khromov, Mikhail, 2014. "Actual problems of the banking system in the Russian Federation," Economic Policy, Russian Presidential Academy of National Economy and Public Administration, pages 7-24.
    6. Marvin Goodfriend & Robert King, 1997. "The New Neoclassical Synthesis and the Role of Monetary Policy," NBER Chapters,in: NBER Macroeconomics Annual 1997, Volume 12, pages 231-296 National Bureau of Economic Research, Inc.
    7. Frederic S. Mishkin, 2011. "Over the Cliff: From the Subprime to the Global Financial Crisis," Journal of Economic Perspectives, American Economic Association, vol. 25(1), pages 49-70, Winter.
    8. Bernanke, Ben S. & Gertler, Mark & Gilchrist, Simon, 1999. "The financial accelerator in a quantitative business cycle framework," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 21, pages 1341-1393 Elsevier.
    9. Frederic S. Mishkin, 2011. "Monetary Policy Strategy: Lessons from the Crisis," NBER Working Papers 16755, National Bureau of Economic Research, Inc.
    10. Gagnon, Marie-Hélène & Gimet, Céline, 2013. "The impacts of standard monetary and budgetary policies on liquidity and financial markets: International evidence from the credit freeze crisis," Journal of Banking & Finance, Elsevier, vol. 37(11), pages 4599-4614.
    11. Kenneth R. French & Martin N. Baily & John Y. Campbell & John H. Cochrane & Douglas W. Diamond & Darrell Duffie & Anil K Kashyap & Frederic S. Mishkin & Raghuram G. Rajan & David S. Scharfstein & Robe, 2010. "The Squam Lake Report: Fixing the Financial System," Economics Books, Princeton University Press, edition 1, number 9261.
    12. Philip Turner, 2010. "Central banks and the financial crisis," BIS Papers chapters,in: Bank for International Settlements (ed.), Perspectives on inflation targeting, financial stability and the global crisis, volume 51, pages 21-25 Bank for International Settlements.
    13. Joseph E. Gagnon & Matthew Raskin & Julie Remache & Brian P. Sack, 2011. "Large-scale asset purchases by the Federal Reserve: did they work?," Economic Policy Review, Federal Reserve Bank of New York, issue May, pages 41-59.
    14. Martin S. Feldstein, 1997. "The Costs and Benefits of Going from Low Inflation to Price Stability," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 123-166 National Bureau of Economic Research, Inc.
    15. Lars E. O. Svensson, 2002. "Monetary policy and real stabilization," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 261-312.
    16. Adrian, Tobias & Song Shin, Hyun, 2010. "Financial Intermediaries and Monetary Economics," Handbook of Monetary Economics,in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 12, pages 601-650 Elsevier.
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    19. repec:pri:cepsud:83svensson is not listed on IDEAS
    20. Raghuram G. Rajan, 2006. "Has Finance Made the World Riskier?," European Financial Management, European Financial Management Association, vol. 12(4), pages 499-533.
    21. S. Drobyshevsky & S. Sinelnikov-Murylev., 2012. "Macroeconomic Preconditions of Realization of a New Growth Model," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 9.
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    Cited by:

    1. Shums'ka S., 2015. "Monetary policy and recovery of economic growth in Ukraine," Economy and Forecasting, Valeriy Heyets, issue 3, pages 21-41.

    More about this item

    Keywords

    monetary policy; Bank of Russia; global economic crisis; inflation; quantitative easing; credit bubble;

    JEL classification:

    • B22 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - Macroeconomics
    • 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

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