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"Front-loading" monetary tightening: pros and cons


  • Paolo Cavallino
  • Giulio Cornelli
  • Peter Hördahl
  • Egon Zakrajsek


In response to the surge in inflation globally, central banks have engaged in the most synchronised and rapid monetary tightening in 50 years. Parsing the evidence from 11 advanced economies since 1970 indicates that "front-loading" of interest rate hikes is successful in countering inflation, even in the face of large and persistent inflationary shocks. Still, front-loaded monetary policy tightening may carry risks to financial stability, especially in an environment of high private and public debt levels or potential fragility in market liquidity.

Suggested Citation

  • Paolo Cavallino & Giulio Cornelli & Peter Hördahl & Egon Zakrajsek, 2022. ""Front-loading" monetary tightening: pros and cons," BIS Bulletins 63, Bank for International Settlements.
  • Handle: RePEc:bis:bisblt:63

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