Based on the 2024 Monetary Policy Conference held at the Hoover Institution at Stanford University, Getting Global Monetary Policy on Track reviews recent global inflation, asking how central banks could have better responded and how they can improve their forecasting and policy strategies to avoid inflationary bursts in the future. Discussions delve into the interactions of fiscal and monetary policies, digital currency, and how the European Central Bank has become more dovish, preferring to keep interest rates low.
The publication shares the presentations from economic experts around the globe, who contribute analysis of monetary policy and strategy from Asia, Europe, Latin America, and the United States, in large economies and in emerging markets. It also reproduces the lively and informative discussions at the conference.
Essays on financial regulation examine asset value and equity levels in the US banking system, Treasury market turmoil, Federal Reserve independence, the 2023 UK pension fund meltdown, and regulatory expansion.
Additional topics include labor market responses to the surge in remote work; how Israel handled financial shocks following the 2023 Hamas attack; and continued fallout from the COVID-19 pandemic: the supply, fiscal, and relative demand shocks of the pandemic and how central banks handled postpandemic inflation.
Praise for How Monetary Policy Got Behind the Curve—and How to Get Back
“An invaluable guide to understanding and resolving the current surge in inflation.”
—Mervyn King, former governor, Bank of England
“This timely conference volume encompasses a broad examination of current key monetary policy challenges. Experts provide insights from differing perspectives about the Fed’s belated move away from the zero lower bound, and about how the Fed can again reach its inflation target. Contributors include both current and former Fed officials.”
—John Lipsky, senior fellow, Foreign Policy Institute, School of Advanced International Studies, Johns Hopkins University, and former first deputy managing director, International Monetary Fund
“This timely and substantive volume is simply a must-read for anyone interested in the way forward for US monetary policy. The volume draws on the insights of current and former Fed officials as well as the expertise and insights offered by a who’s who of academic scholars and financial market participants. The essays are uniformly rigorous and accessible.”
—Richard Clarida, C. Lowell Harriss Professor of Economics and International Affairs, Columbia University
Praise for Getting Monetary Policy Back on Track
“An outstanding conference analyzing the sources of the highest US inflation in forty years and the macroeconomic policies necessary to return inflation to target.”
—James Bullard, dean, Daniels School of Business, Purdue University, and former president and CEO, Federal Reserve Bank of St. Louis
“In this wonderful volume, leading thinkers provide their cutting-edge insights into resolving current and thorny monetary policy issues. . . . Highly recommended.”
—Harald Uhlig, Bruce Allen and Barbara Ritzenthaler Professor in Economics and the College, Kenneth C. Griffin Department of Economics, University of Chicago
“Anyone interested in monetary policy and the challenges raised by the surge in inflation during 2021 and 2022 will profit from reading this timely volume.”
—Carl E. Walsh, Distinguished Professor of Economics Emeritus, University of California, Santa Cruz
Praise for Getting Global Monetary Policy on Track
“This outstanding volume is packed with extremely useful insights from many of the foremost experts serving on the front lines of public policy about the recent performance of central banks and the challenges ahead. It is especially timely.”
—Mark G. Duggan, Wayne and Jodi Cooperman Professor of Economics, Stanford University, and former Trione Director, Stanford Institute for Economic Policy Research
“This excellent volume is essential for understanding the recent history of monetary policy and our path forward. Current and former Fed officials and leading academics all offer valuable insight into the consequential policy questions raised by the events of the last three years. Highly recommended.”
—Randal Quarles, chairman and founder, Cynosure Group, and former vice chairman of the Federal Reserve System
“The Hoover monetary policy series is a ‘must read’ for all academics, central bankers, and market professionals who are looking for in-depth analysis together with a broad perspective on global monetary policy before, during, and after the surge of inflation.”
—Volker Wieland, Endowed Chair of Monetary Economics and managing director, Institute for Monetary and Financial Stability, Goethe University, Frankfurt
Preface
Michael D. Bordo, John H. Cochrane, and John B. Taylor
Welcoming Remarks
Condoleezza Rice
1. Introduction: Getting Global Monetary Policy on Track
John B. Taylor
Introductory Remarks: Michael D. Bordo
2. After Four Crises, the Euro Needs Clearer Boundaries between Fiscal and Monetary Policy
John H. Cochrane and Luis Garicano
3. The Digital Euro
Markus K. Brunnermeier
4. Monetary Policy in Europe: Out of the Woods?
Yuriy Gorodnichenko
5. Monetary Policy in a Sustainable Union
Luigi Bocola
General Discussion
Introductory Remarks: Peter Blair Henry
6. Dollarization as an Effective Commitment Device with Time-Inconsistency Disease and Institutional Anomie: The Case of Argentina
Emilio Ocampo
7. Getting Global Monetary Policy on Track: The Case of Latin America
Tobías Martínez Gonzáles and Juan Pablo Nicolini
8. China’s Monetary Policy: Where Are We Now?
Zhiguo He and Wei Wei
9. Central Bank Independence in Emerging Economies: Recent Successes and Future Challenges
Ross Levine
General Discussion
Financial Regulation and Monetary Policy
Introductory Remarks: Stephen Haber
10. Too Many Rules and Too Much Discretion? Simplifying Financial Regulation
Amit Seru
11. Liquidity Rules Have Increased the Minimum Size of the Fed’s Balance Sheet
Darrell Duffie
12. Can Fed Supervision Be “Independent” under US Law?
Christina Parajon Skinner
13. Financial Stability and Monetary Policy: Lessons from the UK’s LDI Crisis
Carolyn A. Wilkins
General Discussion
Introductory Remarks: John B. Taylor
14. Lane Drifting: Remarks at the Hoover Monetary Policy Conference
Hester M. Peirce
Employment Dynamics, Labor Markets, the Phillips Curve, and Inflation
Introductory Remarks: Valerie Ramey
15. Extraordinary Labor Market Developments and the 2022?23 Disinflation
Steven J. Davis
16. Employment and Inflation Dynamics in the Monetary Policy Armamentarium
Marianna Kudlyak
General Discussion
Introductory Remarks: John H. Cochrane
17. Enhancing Resilience with Monetary Policy Rules
Athanasios Orphanides
18. The Fed’s Strategic Approach to Monetary Policy Needs a Reboot
Mickey D. Levy and Charles I. Plosser
19. Thoughts on the Federal Reserve’s Policy and Framework
Jón Steinsson
20. Reflections on Central Bank Communication
Christopher Ong, Andrew Sacher, and Lawrence H. Summers
General Discussion
Introductory Remarks: John B. Taylor
21. Monetary Policy in Small Open Economies
Amir Yaron
22. Central Bank Communications Beyond “How Many?”
Austan D. Goolsbee
23. Connecting Theory and Practice
John C. Williams
General Discussion
Milton Friedman and the Second Wave of the Great Inflation
Introductory Remarks: John B. Taylor
24. Milton Friedman and the Second Wave of the Great Inflation, 1976–1980
Edward Nelson
General Discussion
