Monetary Policy Quotes
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Monetary policy transmission encompasses the whole continuum of interest rates; of course, the central bank only determines the overnight policy rate.
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Monetary policy cannot do much about long-run growth, all we can try to do is to try to smooth out periods where the economy is depressed because of lack of demand.
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Monetary policy is not a panacea.
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Monetary policy is a blunt tool which certainly affects the distribution of income and wealth, although whether the net effect is to increase or reduce inequality is not clear.
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Monetary policy has less room to maneuver when interest rates are close to zero, while expansionary fiscal policy is likely both more effective and less costly in terms of increased debt burden when interest rates are pinned at low levels.
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Monetary policy is most effective when it is coherent, consistent and predictable as possible, while at all times leaving full scope for flexibility and the use of judgment as conditions may require.
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I think that is a very important milestone in our economic history that the monetary policy is now determined through a committee process where there are both independent committee members and representation from the RBI.
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Government should eschew suasion and directives to banks on interest rates that run counter to monetary policy actions.
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Certainly there is no way to direct the effects of monetary policy at a single class of assets while leaving other financial markets and the broader economy untouched. One might as well try to perform brain surgery with a sledgehammer.
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My preference is for the Federal Reserve to be the systemic risk regulator, because the responsibility for identifying and limiting potential problems is a natural complement to its role in monetary policy.
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Under Chairman Greenspan, monetary policy has become increasingly transparent to the public and the financial markets, a trend that I strongly support.
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Our understanding of the best practice in monetary policy evolved during Alan Greenspan's tenure at the Fed, and it will continue to evolve in the future.
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Inflation is not even a remote risk in the U.S.. Because inflation is so low, monetary policy can afford to be patient to be sure that the recovery is sustained.
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These inflation effects should fade even if energy prices remain elevated, so long as monetary policy keeps inflation expectations well-anchored.
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Providing quantitative guidance about the meaning of 'long-term price stability' could have several advantages, including further reducing public uncertainty about monetary policy and anchoring long-term inflation expectations even more effectively.
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Monetary policy decisions tend to regress toward the mean and to be inertial—and hence biased in just the same way that adaptive expectations are biased relative to rational expectations. But errors like that, while systematic, will generally be small and will tend to shrink over time. And, in return, the system builds in natural safeguards against truly horrendous mistakes.
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The monetary policy committee could either keep rates constant, increase them, or bring them down. There are three options possible compared to when it is accommodative.
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I've always believed in expansionary monetary policy and if necessary fiscal policy when the economy is depressed.
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A snarky but accurate description of monetary policy over the past five years is that the Federal Reserve successfully replaced the technology bubble with a housing bubble...
