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Transcending monetary orthodoxy: The new strategy of modern central banking

Author

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  • Carlos Eduardo Carrasquero Luces

    (Universidad de Los Andes. Mérida. Venezuela. Código Postal 5101.)

Abstract

The global financial crisis which took place at the end of the first decade of the XXI century, revealed the necessity of mending the policy framework that governs central banks worldwide, to accommodate in its toolkit new monetary policy measures. This paper gives an overview of the unorthodox measures implemented by some of the largest economies in the world in their efforts to overcome the crisis, concluding that modern central banks seems to have found that when the interest rate loses the ability to influence the economy by having touched its zero lower bound, monetary liquidity acquires the ability to act at a macroeconomic level without unbalancing the real economy.

Suggested Citation

  • Carlos Eduardo Carrasquero Luces, 2014. "Transcending monetary orthodoxy: The new strategy of modern central banking," Economía, Instituto de Investigaciones Económicas y Sociales (IIES). Facultad de Ciencias Económicas y Sociales. Universidad de Los Andes. Mérida, Venezuela, vol. 39(38), pages 33-58, july-dece.
    • Handle: RePEc:ula:econom:v:39:y:2014:i:38:p:33-58
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    More about this item

    Keywords

    Monetary policy; unorthodox policy; financial crisis.;
    All these keywords.

    JEL classification:

    • 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
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)

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