Monetary policy after the crash: Controlling interest

Posted: September 20, 2013 in economy
Tags: , ,

UK Only Article: 
standard article

Issue: 

The weakened West

Fly Title: 

Monetary policy after the crash

Rubric: 

The third of our series of articles on the financial crisis looks at the unconventional methods central bankers have adopted to stimulate growth in its wake

Main image: 

20130921_SBD001.jpg

BEFORE the financial crisis life was simple for central bankers. They had a clear mission: temper booms and busts to maintain low and stable inflation. And they had a seemingly effective means to achieve that: nudge a key short-term interest rate up to discourage borrowing (and thus check inflation), or down to foster looser credit (and thus spur growth and employment). Deft use of this technique had kept the world humming along so smoothly in the decades before the crash that economists had declared a “Great Moderation” in the economic cycle. As it turned out, however, the moderation was transitory—and the crash that ended it undermined not only the central bankers’ record but also the method they …

via Economic Crisis http://www.economist.com/news/schools-brief/21586527-third-our-series-articles-financial-crisis-looks-unconventional?fsrc=rss

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s