IDEAS home Printed from https://ideas.repec.org/p/fip/fedlps/251.html

Three Challenges to Central Bank Orthodoxy

Author

Abstract

October 2, 2015. In a speech to the Shadow Open Market Committee in New York, St. Louis Fed President James Bullard discussed the orthodox view of current monetary policy, which emphasizes that the FOMC's objectives are close to being met while monetary policy settings remain far from normal, along with three challenges to that view, which relate to strict inflation targeting, low real interest rates and globalization. He concluded that the U.S. economy will likely experience better outcomes if the monetary policy orthodoxy is preserved as the guiding principle.

Suggested Citation

  • James B. Bullard, 2015. "Three Challenges to Central Bank Orthodoxy," Speech 251, Federal Reserve Bank of St. Louis.
    • Handle: RePEc:fip:fedlps:251
    as

    Download full text from publisher

    File URL: https://www.stlouisfed.org/~/media/Files/PDFs/Bullard/remarks/Bullard-SOMC-2-Oct-2015.pdf
    File Function: Full text
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paul Gomme & B. Ravikumar & Peter Rupert, 2011. "The Return to Capital and the Business Cycle," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(2), pages 262-278, April.
    2. Janet L. Yellen, 2015. "Welcoming Remarks : a speech at the \"Monetary Policy Implementation and Transmission in the Post-Crisis Period,\" a research conference sponsored by the Board of Governors of the Federal Re," Speech 876, Board of Governors of the Federal Reserve System (U.S.).
    3. John B. Taylor, 1999. "Introduction to "Monetary Policy Rules"," NBER Chapters, in: Monetary Policy Rules, pages 1-14, National Bureau of Economic Research, Inc.
    4. John B. Taylor, 1999. "A Historical Analysis of Monetary Policy Rules," NBER Chapters, in: Monetary Policy Rules, pages 319-348, National Bureau of Economic Research, Inc.
    5. John B. Taylor, 1999. "Monetary Policy Rules," NBER Books, National Bureau of Economic Research, Inc, number tayl99-1, September.
    6. James Bullard & Eric Schaling, 2009. "Monetary Policy, Determinacy, and Learnability in a Two‐Block World Economy," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(8), pages 1585-1612, December.
    7. Claudio E. V. Borio & Andrew Filardo, 2007. "Globalisation and inflation: New cross-country evidence on the global determinants of domestic inflation," BIS Working Papers 227, Bank for International Settlements.
    8. Kevin L. Kliesen, 2013. "The Fed’s strategy for exiting from unconventional policy: key principles, potential challenges," The Regional Economist, Federal Reserve Bank of St. Louis, issue October.
    9. Bullard, James & Singh, Aarti, 2008. "Worldwide macroeconomic stability and monetary policy rules," Journal of Monetary Economics, Elsevier, vol. 55(Supplemen), pages 34-47, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Donayre, Luiggi & Panovska, Irina, 2018. "U.S. wage growth and nonlinearities: The roles of inflation and unemployment," Economic Modelling, Elsevier, vol. 68(C), pages 273-292.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul Ho & Pierre-Daniel G. Sarte & Felipe Schwartzman, 2022. "Multilateral Comovement in a New Keynesian World: A Little Trade Goes a Long Way," Working Paper 22-10, Federal Reserve Bank of Richmond.
    2. Jensen Henrik, 2011. "Estimated Interest Rate Rules: Do they Determine Determinacy Properties?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 11(1), pages 1-22, May.
    3. George W. Evans & Seppo Honkapohja, 2009. "Expectations, Learning and Monetary Policy: An Overview of Recent Research," Central Banking, Analysis, and Economic Policies Book Series, in: Klaus Schmidt-Hebbel & Carl E. Walsh & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series (ed.),Monetary Policy under Uncertainty and Learning, edition 1, volume 13, chapter 2, pages 027-076, Central Bank of Chile.
    4. James B. Bullard, 2018. "R-star wars: the phantom menace," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 53(2), pages 60-65, April.
    5. Ireland, Peter N., 2003. "Endogenous money or sticky prices?," Journal of Monetary Economics, Elsevier, vol. 50(8), pages 1623-1648, November.
    6. Batini, Nicoletta & Harrison, Richard & Millard, Stephen P., 2003. "Monetary policy rules for an open economy," Journal of Economic Dynamics and Control, Elsevier, vol. 27(11-12), pages 2059-2094, September.
    7. Coenen, Gunter & Wieland, Volker, 2003. "The zero-interest-rate bound and the role of the exchange rate for monetary policy in Japan," Journal of Monetary Economics, Elsevier, vol. 50(5), pages 1071-1101, July.
    8. Wollmershauser, Timo, 2006. "Should central banks react to exchange rate movements? An analysis of the robustness of simple policy rules under exchange rate uncertainty," Journal of Macroeconomics, Elsevier, vol. 28(3), pages 493-519, September.
    9. Kim, Jinill & Ruge-Murcia, Francisco J., 2009. "How much inflation is necessary to grease the wheels?," Journal of Monetary Economics, Elsevier, vol. 56(3), pages 365-377, April.
    10. Coenen, Gunter & Wieland, Volker, 2005. "A small estimated euro area model with rational expectations and nominal rigidities," European Economic Review, Elsevier, vol. 49(5), pages 1081-1104, July.
    11. Pär Österholm, 2005. "The Taylor Rule: A Spurious Regression?," Bulletin of Economic Research, Wiley Blackwell, vol. 57(3), pages 217-247, July.
    12. Raffinot, Thomas, 2017. "Interest-Rates-Free Monetary Policy Rule," Working Papers 06898, George Mason University, Mercatus Center.
    13. Andrew J. Filardo, 2000. "Monetary policy and asset prices," Economic Review, Federal Reserve Bank of Kansas City, vol. 85(Q III), pages 11-37.
    14. Levine, Paul & Pearlman, Joseph, 2011. "Computation of LQ Approximations to Optimal Policy Problems in Different Information Settings under Zero Lower Bound Constraints," Dynare Working Papers 10, CEPREMAP.
    15. Akosah, Nana & Alagidede, Imhotep & Schaling, Eric, 2019. "Unfolding the monetary policy rule in Ghana: quantile-based evidence within time-frequency framework," MPRA Paper 103260, University Library of Munich, Germany, revised 01 Oct 2020.
    16. Trehan, Bharat & Wu, Tao, 2007. "Time-varying equilibrium real rates and monetary policy analysis," Journal of Economic Dynamics and Control, Elsevier, vol. 31(5), pages 1584-1609, May.
    17. Yu Hsing, 2017. "Is Real Depreciation And More Government Spending Expansionary? The Case Of Montenegro," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 20, pages 103-113, December.
    18. Luca Gambetti, 2012. "Shocking Policy Coefficients," UFAE and IAE Working Papers 906.12, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
    19. Janet L. Yellen, 2007. "John Taylor’s contributions to monetary theory and policy," Speech 43, Federal Reserve Bank of San Francisco.
    20. Mr. Roger Farmer & Pawel Zabczyk, 2019. "A Requiem for the Fiscal Theory of the Price Level," IMF Working Papers 2019/219, International Monetary Fund.

    More about this item

    JEL classification:

    • E65 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Studies of Particular Policy Episodes
    • 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
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedlps:251. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Scott St. Louis (email available below). General contact details of provider: https://edirc.repec.org/data/frbslus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.