Since monetary policy affects risk premiums, and these appear to have a stronger influence on economic activity when they rise than when they fall, temporary monetary expansions may both stimulate the economy and sow the seeds of damaging financial market corrections in the future. We...

In this speech, Paul Tucker, Executive Director for Markets and Monetary Policy Committee (MPC) member, discusses the challenges that the turmoil and fragility across financial markets has posed to monetary policy and financial stability. On monetary policy, the conditions were not favourable to...

We study the influence of the exchange rate on the speed of economic recovery in a sample of 67 developed and developing economies over the years 1989-2019. First, using a cross-sectional sample of 341 economic recoveries, we study the effect of nominal depreciation and real undervaluation on...