Yellen’s Inheritance: Monetary Policy in Flux

Joseph G. Carson (pictured) and Darren Williams Evolving economic challenges are transforming central banking around the world. The new monetary-policy doctrine is likely to put greater emphasis on asset-price developments. But, without a true monetary anchor, central banks could still risk a repeat of the recent boom/bust cycle.

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Bank of England’s Growth Focus Might Stir Inflation Ghost

The Bank of England appears to have moved the goalposts. After 30 years of focusing almost exclusively on inflation, monetary policy is now being more explicitly directed toward generating faster growth and lower unemployment.

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Will Carney Light Fireworks at Bank of England?

On July 1, former Bank of Canada governor Mark Carney will replace Sir Mervyn King as governor of the Bank of England. For many observers, this will herald a new dawn in the conduct of British monetary policy. We agree, but think the process will be more evolutionary than revolutionary.

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Rising Asset Prices Sharpen US Policy Challenge

As the housing market wakes up and the stock market rallies, strong gains in asset prices are improving US household wealth and helping to reduce the federal deficit. This is a great boost for confidence, but it also sharpens the challenge facing US fiscal and monetary authorities.

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UK Economic Quagmire Adds Pressure for Monetary Policy Change

Bank of England governor-elect, Mark Carney, has raised hopes that the central bank may soon switch to a nominal GDP target. In our view, the costs outweigh the benefits, but the attractions of a radical new approach will grow if the economy remains stuck in the doldrums.

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