Search Results for: forward guidance

One kind of forward guidance – consciously eschewed by central banks during the crisis – was dubbed ‘Odyssian’. The idea was that, deprived of being able to move the short interest rate by the zero bound, central banks would attempt … Continue reading →

Today was an exciting day for Bank of England junkies, in fact for anyone who gets off on central banking and monetary policy communication [cue to those of you who don’t to quit reading this].  The Monetary Policy Committee ‘updated’ … Continue reading →

As the ECB slides inexorably towards a liquidity trap, debate focuses on whether it might be prepared to engage in a forward guidance policy that implied a Woodford-style inflation target overshoot.  Simon Wren Lewis suggests that a more palatable way … Continue reading →

Another thought on the Coalition’s attempt to manage expectations about fiscal policy. My last post on the Coalition’s fiscal policy, in a nutshell, said that although the eventual path of the deficit, ex post, turned out not too far wrong, … Continue reading →

Simon Wren Lewis writes ‘in defence of forward guidance‘.  He scolds Chris Giles, myself and others for ‘panning’ the Bank of England, for fear that it might retreat away from this bold experiment back into its natural, conservative, and insular … Continue reading →

MPC have stressed that their version of Forward Guidance, unlike the original Woodfordian policy to which the term normally refers, is quite different.  Unlike the Woodfordian policy, the Bank of England are not communicating that rates would be lower for … Continue reading →

Recently the Fed was criticised for talking about tapering and then, when it saw how much the yield curve and asset prices reacted, backing off.  The UK’s Monetary Policy Committee has likewise been criticised as somehow messing up forward guidance … Continue reading →

One of the benefits of forward guidance that the MPC is counting on, and has trumpeted, is that it will reduce uncertainty about future interest rates.   Lower uncertainty should increase spending as economic agents need to put less aside to … Continue reading →

The Bank of England has been trying to clarify what it was doing when it launched its policy of forward guidance, committing not to think about tightening monetary policy until unemployment fell to 7% (provided….).  The fog is lifting somewhat, … Continue reading →

The key question at the heart of the revelation of the new framework for the implementation of monetary policy is whether it constitutes a loosening of monetary policy, relative to what was envisaged before. It seems inconceivable that there could … Continue reading →