Report
Central banks have too many objectives
One might expect an economic policy implementing institution to have as many tools as objectives. Central banks have two tools: short-term interest rates and asset purchases (mainly of bonds). But in the recent period, they have been given many more than two objectives . They must: Combat inflation; Combat financial instability; Maintain debt sustainability; Reduce inequality and unemployment; Support the energy transition and investment. When a n economic policymaking institution has many more objectives than tools, it becomes ineffective because it has to find a compromise between these objectives and generates a lot of dissatisfaction with its performance.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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