Taking stock of new Fed and ECB monetary policy frameworks
Past Event
The U.S. Federal Reserve and the European Central Bank have crafted new monetary policy frameworks for an era in which interest rates are hovering close to zero. The Fed’s flexible average inflation targeting approach aims at inflation that averages 2% over time; when inflation has been running persistently below that level, the Fed will aim for inflation moderately above 2% for some time. It also aims at a “broad-based and inclusive” definition of maximum employment. The ECB says its goal is inflation of 2% over the medium term, and it describes its commitment to this target as symmetric (meaning it would be equally concerned about below- and above-target inflation). Are these new frameworks well understood by markets, businesses, consumers, and politicians? Have the central banks communicated them well? How have these frameworks been implemented so far? Are they well-suited for the current economic environment?
The Hutchins Center on Fiscal & Monetary Policy at Brookings hosted a discussion of these issues by Richard Clarida, vice chair of the Federal Reserve Board; Philip Lane, member of the ECB’s Executive Board; and Ben Bernanke, distinguished senior fellow at Brookings and former chair of the Federal Reserve. Following that discussion was a panel of Fed watchers—Julia Coronado of Macro Policy Perspectives; William Dudley, former president of the Federal Reserve Bank of New York; and Tiffany Wilding of PIMCO.
During the live event, the audience submitted questions at sli.do using the code #FedFramework, or join the conversation on Twitter using the hashtag #FedFramework.
Agenda
Welcome
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
Overview of central bank frameworks
Ben S. Bernanke
Distinguished Senior Fellow - Economic Studies - The Brookings Institution
Richard Clarida
Vice Chair - Board of Governors of the Federal Reserve
Philip R. Lane
Member of the ECB's Executive Board - European Central Bank (ECB)
Is the Fed framework well understood?
David Wessel
Director - The Hutchins Center on Fiscal and Monetary Policy
Senior Fellow - Economic Studies
Julia Coronado
President & Founder - MacroPolicy Perspectives
Clinical Associate Professor of Finance - University of Texas at Austin
Bill Dudley
Former President & CEO - Federal Reserve Bank of New York
Ayşegül Şahin
Richard J. Gonzalez Regents Chair in Economics - University of Texas at Austin
Tiffany Wilding
Executive Vice President and North American Economist - PIMCO
More Information
To subscribe or manage your subscriptions to our top event topic lists, please visit our event topics page.