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Monetary policy challenges: how central banks changed their modus operandi

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  • Giorgio Giorgio

Abstract

The financial crisis that started in August 2007 deeply changed the modus operandi of monetary policy on both sides of the Atlantic Ocean and stimulated a debate about how to formally define and practically implement newly relevant objectives, such as systemic stability, in the reaction function of the Monetary Authorities. This paper provides an assessment of the monetary policy decisions and interventions undertaken by the FED and the ECB, and evaluates the respective monetary policy regimes in place before and during the crisis according to the lessons derived from the theoretical literature on monetary policy developed in the last 2 decades. Copyright Eurasia Business and Economics Society 2014

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  • Giorgio Giorgio, 2014. "Monetary policy challenges: how central banks changed their modus operandi," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 25-43, June.
    • Handle: RePEc:spr:eurase:v:4:y:2014:i:1:p:25-43
    DOI: 10.1007/s40822-014-0002-5
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    2. Ergun Ermisoglu & Yasin Akcelik & Arif Oduncu & Temel Taskin, 2014. "Effects of additional monetary tightening on exchange rates," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 71-79, June.
    3. Emre Ozsoz & Mustapha Akinkunmi & Ismail Cagri Ay & Ademola Bamidele, 2017. "How Cbn Confronted The Meltdown: The Global Financial Crisis And The Central Bank Of Nigeria’S Response," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 147-161, March.
    4. Hakan Danis, 2017. "Nonlinearity and asymmetry in the monetary policy reaction function: a partially generalized ordered probit approach," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 7(2), pages 161-178, August.
    5. Ahmet Aysan & Salih Fendoglu & Mustafa Kilinc, 2014. "Managing short-term capital flows in new central banking: unconventional monetary policy framework in Turkey," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 45-69, June.
    6. Ahmet Faruk Aysan & Mustafa Disli & Huseyin Ozturk, 2017. "Financial Crisis, Macroprudential Policies And Depositor Discipline," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 5-25, March.
    7. Ad Van Riet, 2017. "A New Era For Monetary Policy: Challenges For The European Central Bank," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 57-86, March.
    8. Sayuri Shirai, 2014. "Japan’s monetary policy in a challenging environment," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 3-24, June.
    9. Michal Jurek & Pawel Marszalek, 2015. "Policy alternatives for the relationship between ECB monetary and financial policies and new member states," Working papers wpaper112, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    10. Rocco Ciciretti & Iftekhar Hasan & Maya Waisman, 2015. "Distribution strategy and movie performance: an empirical note," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(1), pages 179-187, June.
    11. Piotr Ciżkowicz & Andrzej Rzońcaz, 2017. "Are Major Central Banks Blinded By The Analytical Elegance Of Their Models? Possible Costs Of Unconventional Monetary Policy Measures," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 87-108, March.
    12. Conrado Diego García-Gómez & Ender Demir & Ming-Hsiang Chen & José María Díez-Esteban, 2022. "Understanding the effects of economic policy uncertainty on US tourism firms’ performance," Tourism Economics, , vol. 28(5), pages 1174-1192, August.
    13. Ali Ashraf & M. Kabir Hassan & William J. Hippler, 2017. "Monetary Shocks, Policy Tools And Financial Firm Stock Returns: Evidence From The 2008 Us Quantitative Easing," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 62(01), pages 27-56, March.

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    More about this item

    Keywords

    Monetary policy; Central banking; Financial crisis; E52; E58; E42;
    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
    • E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System

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