Friday, May 3, 2024
Hoover Institution | Stanford University
The Hoover Institution Economic Policy Working Group hosts “Getting Global Monetary Policy on Track," its annual monetary policy conference on Thursday, May 2, 2024 at Stanford University.
Athanasios Orphanides described how interest rates deviated from most rules, and advocated improvements in how policy rules could be better integrated into the policy process to avoid a repetition of the original mistake.
Mickey Levy and Charles Plosser also reviewed how the current strategy went wrong in the post pandemic inflation. They argue for greater commitment to the 2% target, rules as guidelines, abandoning forward guidance as a separate tool, benchmark more closely to rules, and improve the economic projections.
Jón Steinsson emphasized supply, fiscal, and relative demand shocks of the pandemic, and how a strategy focused on the worry that inflation was 1.7 percent rather than 2 percent at the zero-bound led to too loose policy. He emphasized the importance of anchoring expectations, and that adherence to rules is only one way to achieve credibility.
Larry Summers offered a clear but dissenting view, arguing against formal targets or rules at all, that projections and forward guidance are unhelpful.
“Getting Global Monetary Policy on Track" was the theme this year following up on last year’s theme “How to Get Back on Track," and the previous year’s theme “How Monetary Policy Got Behind the Curve.” A key goal of the conference is to examine how to get back and stay on track and, thereby, how to reduce the inflation rate without slowing down economic growth. This year the key policy issues are largely international, with special discussions of Europe and Asia. This is a policy-oriented conference consisting of formal presentations, policy panels, and in-depth discussions.
Read The Fed’s Strategic Approach to Monetary Policy Needs a Reboot
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Read Thoughts on Fed Policy and the Fed’s Framework
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Athanasios Orphanides, Massachusetts Institute of Technology (slides)
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Mickey Levy and Charles Plosser, Shadow Open Market Committee (slides)
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Jón Steinsson, University of California, Berkeley (slides)
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Lawrence Summers, Harvard University (slides)
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Chair: John Cochrane, Stanford University
For more information, visit www.hoover.org/events/getting....