Vox column: Re-evaluating the result that the costs of “leaning against the wind” exceed the benefits, January 24, 2017.
The IMF and the Federal Open Market Committee have both suggested that the costs of ‘leaning against the wind’ exceed the benefits. This Vox column responds to claims that the results of my research backing up this conclusion could be overturned. It argues that the alternative assumptions necessary to overturn the result are unrealistic, and that the finding that the costs of the policy exceed the benefits therefore seems to be robust.
The column summarizes “How Robust Is the Result That the Cost of “Leaning Against the Wind” Exceeds the Benefit? Response to Adrian and Liang.”
“Commentary on Monetary Policy and Financial Stability” (slides), presented at “Challenges to Financial Stability in a Low Interest Rate World,” Annual International Journal of Central Banking Research Conference, Federal Reserve Bank of San Francisco, November 21-22, 2016.
Published as “Leaning Against the Wind: Costs and Benefits, Effects on Debt, Leaning in DSGE Models, and a Framework for Comparison of Results,” International Journal of Central Banking 13 (September 2017) 385-408.
The text is now available of my Comment on “Rules versus Discretion: A Reconsideration,” by Narayana Kocherlakota, Brookings Papers on Economic Activity, Fall 2016, 41-48.
“Should Monetary Policy Take Financial-Stability Considerations into Account at the ELB?”, panel presentation (slides) at the First ECB Annual Research Conference, “Monetary Policy and Financial Stability in a Low Interest Rate Environment,” Frankfurt, September 28-29, 2016.
Discussion (slides) of Gelain, Lansing, and Natvik: “Leaning against the credit cycle,” Swiss National Bank Research Conference “New Perspectives on the role, instruments and effects of monetary policy,” Zurich, September 23-24, 2016.
Discussion (text, slides) of Kocherlakota, “Rules versus Discretion: A Reconsideration,” Brookings Papers on Economic Activity, Fall 2016 Conference, Washington, DC, September 15-16, 2016.
Keynote presentation at the Norges Bank Conference “Rethinking Inflation Targeting,” Oslo, September 8-9, 2016. Slides. Paper.
“The Recent Swedish Experience of Monetary Policy and Macroprudential Policy,” slides presented at Riksrevisionen (The Swedish National Audit Institution), Stockholm, August 30, 2016.
Discussion (slides) of Filardo and Rungcharoenkitkul, “Quantitative case for leaning-against-the-wind,” CCBS Research Forum on Macro Finance, Bank of England, London, May 26-27, 2016.
FOMC April 26-27 minutes on the relationship between monetary policy and financial stability (pp. 2-3):
Most participants judged that the benefits of using monetary policy to address threats to financial stability would typically be outweighed by the costs associated with deviations from the Committee’s employment and price-stability objectives induced by such actions; some also noted that the benefits are highly uncertain.
“The Recent Swedish Experience of Monetary Policy and Macroprudential Policy,” slides presented at Finansbolagens informationsmöte, Grand Hotel, Stockholm, May 20, 2016.
Substantially revised and updated on May 15, 2016.
On Thursday, May 12, the Finance Committee of the Riksdag had a hearing on the review by Marvin Goodfriend and Mervyn King of Swedish monetary policy. I had the opportunity of asking some questions at the hearing. They were: Continue reading