Report
Should central banks return to a systematic monetary policy? A look at "rules versus discretionary policy"
Today, monetary policy is discretionary: central banks no longer follow systematic monetary policy rules, they have new objectives, they change their behaviour over time and they react unexpectedly to new developments. This creates uncertainty, which is negative: economic agents can no longer correctly predict central banks' decisions due to their discretionary nature, and the volatility of economies and financial markets is increased. One may then ask the question of returning to rules, possibly more complex than the Taylor Rule, that would link monetary policy to inflation, unemployment, the employment rate, and perhaps also investment needs, inequalities, etc., but all this in a stable and predictable way over time.
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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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