The world economy has experienced the largest financial crisis in generations, a global pandemic, and a resurgence in inflation during the first quarter of the 21st century, yielding important insights for central banking. Price stability has important benefits and is the responsibility of a central bank. Achieving price stability in a complex and uncertain environment involves a credible commitment to a nominal anchor with a strong response to inflation and pre-emptive leaning against an overheating economy. Associated challenges imply that central bank communication and transparency are key elements of monetary policy strategies and tactics. Crises have emphasized the role of central banks in promoting financial stability, as financial stability is key to achieving price and economic stability, but this role increases risks to independence. Goals for central banks other than price and economic stability, complemented by financial stability, can make it more difficult for them to stabilize both inflation and economic activity.
Authors
- Acknowledgements & Disclosure
- Prepared for The Oxford Handbook of Banking, Fourth Edition. The authors would like to thank Jane Krohn for her research assistance. The views expressed here are our own and are not necessarily those of the Board of Governors of the Federal Reserve System, Columbia University, or the National Bureau of Economic Research. Disclosure of Mishkin’s outside compensated activities can be found on his website at http://www0.gsb.columbia.edu/faculty/fmishkin/ Frederic S. Mishkin Frederic S. Mishkin DISCLOUSRE OF OUTSIDE COMPENSATED ACTIVITIES As of February 2024 (2005 to present, excludes honoraria of $1,000 or less and royalty income from books) Consulting: Federal Reserve Bank of New York, Bank of Korea; National Bureau of Economic Research, FDIC, Interamerican Development Bank; 4 hedge funds, BTG Pactual, Gavea Investimentos; Reserve Bank of Australia, Federal Reserve Bank of San Francisco, Einaudi Institute, Bank of Italy Teaching: Study Center Gerzensee, Swiss National Bank Speeches and Presentations: Lexington Partners; Tudor Investment, Brevan Howard, UBS, Pension Real Estate Association; Goodwin Proctor, Penn State University, Villanova University, Shroeder’s Investment Management, Premiere, Inc, Muira Global, Bidvest, NRUCF, BTG Asset Management, Futures Industry Association, ACLI, Handelsbanken, National Business Travel Association, Goldman Sachs, Urban Land Institute, Deloitte, Barclays Capital, CME Group; Barclays Capiital, BNP Paribas, Fidelity Investments, Deutsche Bank, Freeman and Co., Bank America, Treasury Mangement Association, International Monetary Fund; Kairos Investments, Deloitte and Touche, Instituto para el Desarrollo Empreserial de lat Argentina, Handelsbanken, Danske Capital, WIPRO, University of Calgary, Pictet & Cie, Zurich Insurance Company, Central Bank of Chile, Manhattanville College, Deloitte and Touche, RBC Capital Markets, Handelsbanken, Elliot Management, Arizona State University, Goldman Sachs, Investment Management Consultants Association, Griswold Center for Economic Policy Studies at Princeton University, Federal Reserve Bank of Dallas, World Bank, Goldman Sachs, KPMG, Central Bank of Nigeria, UBS, Federal Reserve Bank of Boston, American Council of Life Insurance, Oesterreichische Nationalbank, Fondo Latinamericano de Reservas, Reserve Bank of Australia, Federal Reserve Bank of Boston, UBS, HSBC, Korea Capital Market Institute, HDFC Bank, BCA Research, Bowdoin College, Vanderbilt University Advisory Committee, Alfred P. Sloan Foundation’s Economic and Education Program Co-Director, U.S. Monetary Policy Forum CNBC Contributor COMMISSIONED REPORTS/PAPERS National Bureau of Economic Research: “Two Decades of Japanese Monetary Policy and the Deflation Problem,” (with Takatoshi Ito) in Takatoshi Ito and Andrew Rose, eds., Monetary Policy Under Very Low Inflation Rates, NBER East Asia Seminar on Economics, Vol. 15 (University of Chicago Press: Chicago, 2006), pp. 131-193.Sveriges Riksdag (Swedish parliament): An Evaluation of Swedish Monetary Policy Between 1995 and 2005 (with Francesco Giavazzi) (Sveriges Riksdag: Stockholm, Sweden 2006).Icelandic Chamber of Commerce: with Tryggvi Herbertson, Financial Stability in Iceland (Reyjavik: Icelandic Chamber of Commerce, 2006).Bank of Korea: “Getting to a Low Inflation Environment,” in Bank of Korea, Monetary Policy in a Low Inflation Environment: The Bank of Korea International Conference 2006 (Bank of Korea: Seoul 2006): 7-24.Bank of Canada: “The Inflation Targeting Debate,” Bank of Canada, Annual Conference, (Bank of Canada: Ottawa, 2006), pp. 195-220.Bank of Spain: “Financial Stability and Globalization: Getting It Right,” in Santiago Fernandez de Lis and Fernando Restoy, eds., Central Banks in the 21st Century (Bank of Spain: Madrid, 2006), pp. 215-253.Central Bank of Chile: ““Does Inflation Targeting Matter?” (with Klaus Schmidt-Hebbel) in Frederic S. Mishkin and Klaus Scmidt-Hebbel, eds., Monetary Policy Under Inflation Targeting (Central Bank of Chile: Santiago 2007), pp. 291-372.Swiss National Bank: “Inflation Targeting: True Progress or Repackaging of an Old Idea?” in Swiss National Bank, ed., The Swiss National Bank, 1907-2007 (Neue Zurcher Zeitung Publishing: Zurich, 2007), pp. 599-623.Deutsche Bundesbank: “Will Monetary Policy Become More of a Science?” in Deutsche Bundesbank, ed., Monetary Policy Over Fifty Years: Experiences and Lessons (Routledge: London 2009), pp. 81-107.National Bureau of Economic Reserach: “The Financial Crisis and the Federal Reserve,” NBER Macro Annual, 2009, pp. 495-508.Federal Reserve Bank of San Francisco: “Commentary on ‘Fire, Flood and Lifeboats: Policy Response in the Global Crisis of 2007-2009,” Reuven Glick and Mark M. Spiegel, eds. Asia and the Global Financial Crisis, Asia Economic Policy Conference (San Francisco: Federal Reserve Bank of San Francisco, 2009), pp. 251-257. U.S. Monetary Policy Forum: “Financial Conditions Indexes: A Fresh Look After the Financial Crisis,” (with Jan Hatzius, Peter Hooper, Frederic Mishkin, Kermit L. Schoenholtz and Mark W. Watson) U.S. Monetary Policy Forum (Chicago: Chicago Booth Initiative on Global Markets, 2010) pp. 3-59.Brookings Institution: “Comments on Campbell, Shiller, and Viceira” Brookings Papers on Economic Activity (forthcoming).National Bureau of Economic Research: “Discussion of Takatoshi Ito’s “Great Inflation and Central Bank Independence in Japan,” in Michael Bordo and Athanasios Orphanides, editors, The Great Inflation (University of Chicago Press: Chicago, forthcoming.)European Central Bank: “Monetary Policy Strategy: Lessons From the Crisis” in Monetary Policy Revisited: Lessons from the Crisis (European Central Bank: Frankfurt, forthcoming.) Bank of Korea: “Macroprudential Policy in Emerging Market Economies” 2010, and conference version, Federal Reserve Bank of San Francisco.. Reserve Bank of Australia: “How Should Central Banks Respond to Asset-Price Bubbles? The ‘Lean’ versus ‘Clean’ Debate After the GFC? Reserve Bank of Australia Bulletin (June Quarter 2011), pp. 59-69.).American Enterprise Institute: “The Federal Reserve After the Crisis,” in Vincent Reinhart, editor, No Way Out: Persistent Government Interventions in the Great Contraction (Washington, D.C.: American Enterprise Institute, forthcoming 2012).Federal Reserve Bank of San Francisco: “Macroprudential Policies in Open Emerging Market Economies” (with Joon-Ho Hahm, Hyun Song Shin and Kwanho Shin) in Reuven Glick and Mark M. Spiegel, eds. Asia in the Post-Crisis Economy, 2011 Asia Economic Policy Conference (San Francisco: Federal Reserve Bank of San Francisco, 2012) pp. 63-114.Pictet and Cie: “Monetary Policy is Evolving,” Perspectives (Special Edition 2013) , pp. 14-16.U.S. Monetary Policy Forum: “Crunch Time: Fiscal Crises and the Role of Monetary Policy,” U.S. Monetary Policy Forum (Chicago: Chicago Booth Initiative on Global Markets, 2013), pp. 5-60 Exit Strategy (with Alan Blinder, Donald Kohn and Thomas Jordan) Geneva Reports on the World Economy 15 (International Center for Monetary and Banking Studies and Centre for Economic Policy Research: Geneva and London, 2013).“Commentary: Surprising Similarities: Recent Monetary Regimes of Small Economies” in Reuven Glick and Mark M. Spiegel, eds., Prospects for Asia and the Global Economy, 2013 Asia Economic Policy Conference (San Francisco: Federal Reserve Bank of San Francisco, 2013), pp. 193-198.Central Bank of Chile: “Central Banking After the Crisis,” in Sofia Bauducco, Lawrence Christiano and Claudio Raddatz, eds., Macroeconomic and Financial Stability: Challenges for Monetary Policy Sixteenth 16th Annual Conference of the Central Bank of Chile (Central Bank of Chile: Santiago, 2015), pp. 23-59 “Unprecedented Actions: The Federal Reserve’s Response to the Global Financial Crisis in Historical Perspective,” (with Eugene White) in Mark Wynne and Michael Bordo, eds., The Federal Reserve System’s Role in the Global Economy: An Historical Perspective (Cambridge University Press: Cambridge 2016), pp. 220-258.U.S. Monetary Policy Fourm, “Language After Liftoff: Fed Communication Away from the Zero Lower Bound,” U.S. Monetary Policy Forum, February 26, 2016.Federal Reserve Bank of Boston, “Improving the Use of Discretion in Money Policy”, Federal Reserve Bank of Boston Annual Confrernce, 2017.Fondo Latinamericano de Reservas, “Monetary Policy Communication and Inflation Expectations,” in New Horizons of Global Monetary Policy: Emerging Economies and Latin America: More Questions than Answers (Fondo Latinamericano de Reservas, 2018), pp. 24-45.U.S. Monetary Policy Forum, “Prospects for Inflation in a High-Pressure Economy: Is the Phillips Curve Dead or is it Just Hibernating?” February 2019.U.S. Monetary Policy Forum, “Managing Disinflations,” February 2023.
- DOI
- https://doi.org/10.3386/w32237
- Published in
- United States of America
