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During this pandemic, the ASI has investigated a wide array of topics, from the fiscal and regulatory response to civil society and innovation. But we have yet to discuss perhaps one of the most important: monetary policy.
Over recent decades, central banks have gradually received operational independence, leading monetary policy to slowly move off the political agenda. But, central banks are still expected to follow a politically-set mandate, in most cases to target an explicit level of inflation.
While inflation targets helped address the historic plague of rampant price increases, questions have been raised about its appropriateness since the financial crisis. An alternative approach, in which central bankers target nominal GDP, has been proposed to help ensure economic growth during times of low inflation.
The Covid-19 crisis has once again highlighted the need for creative thinking about the role of central banks. We have assembled a panel of some of world's foremost monetary policy experts to discuss the potential of NGDP targeting, whether some central banks have already been following this to some extent, and whether we should update the mandates of central banks.
Panellists:
Matt Kilcoyne is the Deputy Director of the Adam Smith Institute (Host)
Scott Sumner is Director of the Program on Monetary Policy at the Mercatus Center at George Mason University, a Research Fellow at the Independent Institute, and professor who teaches at Bentley University in Waltham, Massachusetts. He authored the ASI’s paper ‘The case for NGDP targeting: lessons from the Great Recession’ in 2011.
David Beckworth is a Senior Research Fellow at the Mercatus Center at George Mason University and a former international economist at the US Department of the Treasury. He is the author of Boom and Bust Banking: The Causes and Cures of the Great Recession.
Anthony J. Evans is professor of economics at ESCP Business School and is the author of Markets for Managers (Wiley, 2014).