Report
Patrick Artus

What are the possible explanations of central banks’ behaviour?

Central banks across the OECD have adopted a new behaviour: they keep monetary policies expansionary even at the end of expansion periods, even at full employment. How can we explain this central bank behaviour, which is completely different from that in the past? We see three possible explanations: The fact that they maintain a strict inflation objective despite the low level of inflation; A shift to “Keynesian" central banks that put great emphasis on stimulating activity; "Fiscal dominance", governments’ constraint to maintain fiscal solvency .
Provider
Natixis
Natixis

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Analysts
Patrick Artus

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