Whether it is having been with the IMF working on the fiscal accounts in Buenos Aires in May 1989 when inflation was 198 percent that month alone; in Azerbaijan with the first team to arrive after the dissolution of the Soviet Union; supervising advisory work in Zimbabwe and Zambia; or travelling to Seoul and New York during the current crisis…while we may not have seen it all we probably have come closer than anyone else in the market to having a truly global perspective on the essentials of monetary policy and its implementation.
Interested in understanding the essential differences between inflation targeting, price level targeting, and the gold standard? Curious about the differences between the ways fixed exchange rates and currency boards constrain monetary policy? Wonder how Greece cut its money supply literally in half after the First World War? Trying to figure out how, when and why the Federal Reserve will exit? You’ve come to the right place.
While we do believe our cross country experience with monetary policy is a rare commodity in today’s market, many academics have a good handle on the essentials of modern monetary policy design. Where they are lacking and where our background is exceptionally strong is in monetary policy implementation. Monetary policy implementation is like plumbing. As long as it is working, no one, apart from plumbers, spends any time thinking about how it works. Once it is broken, though, it quickly attracts a lot of attention. And, as you may know, amateur plumbers can do a lot of damage, particularly when they are overconfident. Having central bank operational experience provides one with a correct, and sometimes completely different understanding of the mechanics of monetary policy than is found commonly in academia and, surprisingly, even on central bank boards. A correct understanding of the plumbing of implementation is essential for understanding the hows, whys and whens of QE exit.
Is “credit easing” really different from “quantitative easing”? Why you should forget everything you ever learned about the money multiplier and the role of bank reserves in credit creation. What relevance does the Norges Bank operational target have for the Federal Reserve going forward? How have the approaches of the UK, US and Norway toward supporting the mortgage backed securities market differed and does it matter? Is Federal Reserve policy “pouring” liquidity into emerging markets or is this a mistaken simile?
Condensing the Fed's Balance Sheet is as Simple as This bit.ly/2mb1B9sFEDBala…1st March @ 01:13
If the Fed is thinking of shrinking its balance sheet anytime soon it ought to be reinvesting maturing proceeds in bills not notes and bonds22nd February @ 18:33
If German Treasury can issue 2yrs @ - 90 bps and place funds at Bundesbank @ - 40 bps, is it not an insult to fiscal probity not to do so?22nd February @ 14:00
Restructuring the Fed Balance Sheet Expeditiously: A Sensible Contingency Plan bit.ly/2fOdJrE13th November @ 04:01
Negative rates would be a lot more popular if central banks and sovereigns lent at them rather than borrowing at them30th August @ 21:43