Monetary policy in uncertain times: toward robustness and resilience. Key findings from the 50th OeNB Economics Conference and 60th SUERF Anniversary Conference (May 22 and 23, 2023)

When central banks of advanced economies conducted monetary policy strategy reviews in the early 2020s, they did so during a period characterized by a persistent undershooting of inflation targets. Thus, the key objective of the reviews was to explore ways of increasing the effectiveness of monetary policy in bringing inflation and inflation expectations back to target at the effective lower bound. Given that in 2021 the tides turned to a dramatic overshooting of inflation targets, the question arises whether the analyses made at the time were overly focused on a particular state of the world and failed to be adequately robust to accommodate the possibility of dramatically and fast-changing circumstances. The current environment is characterized by higher volatility and increased uncertainty about economic conditions and has shown how large and sudden shocks can sharply change economic and financial conditions in a matter of months, not only locally but also globally. Marking the 50th anniversary of the OeNB’s Annual Economic Conference and SUERF’s 60th anniversary, the OeNB and SUERF jointly organized a two-day high-level research and policy conference, which was attended by 781 participants (315 at the Vienna Museumsquartier and 466 online). The conference explored avenues to render central banks’ strategies and analytical tools more robust and resilient to unexpected changes in the conditions under which they may need to operate; how to make monetary policy decisions robust and resilient to uncertain outcomes; the importance of interaction between fiscal policy and monetary policy and how to tailor central bank communication to high inflation and high uncertainty. Additionally, the conference presented research by a select group of young economists on inflation and the transmission of monetary policy.