The Pie: An Economics Podcast
Knowing When to Stop: The Unintended Consequences of Monetary Policy
Mar 19, 2024
Panel discussion with Raghuram Rajan, Charles Evans, and Randall Kroszner on central bank responsibilities, unintended consequences of monetary policy, implications of altering inflation targets, challenges faced by Chairman Powell, distinguishing actions for financial stability, and unconventional bank stress testing scenarios.
36:17
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Quick takeaways
- Clear distinctions are needed between financial stability actions and monetary policy decisions.
- Stress tests on banks assess resilience against diverse scenarios to enhance preparedness for economic challenges.
Deep dives
Discussion on Monetary Policy Objectives
Panelists engage in a conversation about the objectives of monetary policy, focusing on the responsibilities outlined in the Federal Reserve Act. The discussion involves the importance of promoting monetary and financial conditions to support maximum employment and price stability. Key points raised include the Federal Reserve's inflation objective of 2%, the relevance of anchored inflation expectations, and the challenges of low economic growth impacting real interest rates.
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