IMF Staff Position Notes

Rethinking Macroeconomic Policy

Author/Editor:

Olivier J Blanchard ; Giovanni Dell'Ariccia ; Paolo Mauro

Publication Date:

February 12, 2010

Electronic Access:

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Summary:

The great moderation lulled macroeconomists and policymakers alike in the belief that we knew how to conduct macroeconomic policy. The crisis clearly forces us to question that assessment. In this paper, we review the main elements of the pre-crisis consensus, we identify where we were wrong and what tenets of the pre-crisis framework still hold, and take a tentative first pass at the contours of a new macroeconomic policy framework.

Series:

Staff Position Note No. 2010/03

Subject:

Bank credit Bank regulations Bank supervision Central bank role Economic policy Economic stabilization Financial crisis Financial intermediation Fiscal policy Global Financial Crisis 2008-2009 Inflation targeting Interest rate policy Liquidity management Monetary policy