How monetary policy affects the economy is a central question in macroeconomics. Standard economic thinking predicts interest rate cuts boost economic activity. This idea has recently been challenged by claims that changes in monetary policy have a so-called ‘information effect’. Calvin He explores this concept further in this discussion paper.

This white paper aims to understand how varying economies have changed their monetary and fiscal policies to respond to the pandemic-induced economic crisis.

Monetary policy is not the answer to our economic problems; and central bank actions could be making matters worse. This paper outlines an argument that monetary policy in most advanced economies is suffering from overreach, and has been for much of the past decade.

The present paper addresses the question of how to estimate a social welfare function defined over inflation and unemployment that can help inform the policy decisions of central banks by providing a way to measure the well-being costs arising from macroeconomic fluctuations.

How damaging are uncertainty shocks during extreme events such as the great recession and the COVID-19 outbreak? Can monetary policy limit output losses in such situations? This paper outlines economic modelling for policymakers.