The global economy has performed very poorly since the onset of the crisis in 2008. This paper argues that easy monetary policy has actually worsened economic prospects to date, being based on a fundamental, ontological error. The economy is not an understandable and controllable machine as...

The quip from books on military history is that the generals plan to fight the next war as if it were going to be similar to the last war. The counterpart statement for those who develop regulatory initiatives to forestall banking crises is that they still do not understand that the cause of the...

The remarkable stability of low domestic inflation in many countries requires explanation. In this paper, a number of competing hypotheses are evaluated on a stand-alone basis, and all are found to be inadequate. This includes the view that this outcome has been solely the result of more...

No one in the industrial countries should now question the substantial economic benefits associated with reducing inflation from earlier, high levels. At the same time, history also teaches that the stability of consumer prices might not be sufficient to ensure macroeconomic stability. Past...

This paper was presented at the Federal Reserve Bank of Kansas City's Symposium on Monetary Policy and Uncertainty: Adapting to a Changing Economy at Jackson Hole, Wyoming on 28-30 August 2003. The views expressed are those of the authors and do not necessarily reflect those of the BIS

Significant attention has recently been directed to the optimal policy response when financial excesses threaten. This paper rather addresses issues pertinent to the appropriate policy response once financial difficulties have actually materialised. It begins with some empirical evidence...