## Monetary Policy in the New Normal

_Staff Discussion Notes, April 4, 2014_

## Source details

**Canonical URL:** [Monetary Policy in the New Normal](https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/monetary-policy-in-the-new-normal-41419)

## Other formats

- [Markdown version](/en/publications/staff-discussion-notes/issues/2016/12/31/monetary-policy-in-the-new-normal-41419/index.md)
- [Structured JSON version](/en/publications/staff-discussion-notes/issues/2016/12/31/monetary-policy-in-the-new-normal-41419/index.json)
- [Bundle manifest](/en/publications/staff-discussion-notes/issues/2016/12/31/monetary-policy-in-the-new-normal-41419/bundle-manifest.json)

## Bibliographic details
- Authors: Tamim Bayoumi, Giovanni Dell'Ariccia, Karl F Habermeier, Fabian Valencia
- Published: April 4, 2014
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9781475561784.006

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### Authors and publication details
- Tamim Bayoumi, Giovanni Dell'Ariccia, Karl F Habermeier, Fabian Valencia
- April 4, 2014
- Staff Discussion Notes No. 2014/003

### Summary and scope
- The Staff Discussion Note (SDN) takes stock of the debate on the shape that monetary policy should take after the crisis.
- Revisits the pros and cons of expanding the objectives of monetary policy.
- Examines the merits of turning unconventional policies into conventional ones.
- Considers how to make monetary policy frameworks more resilient to the risk of being constrained by the zero-lower bound going forward.
- Analyses institutional challenges to preserve central bank independence with regards to monetary policy, while allowing adequate government oversight over central banks’ new responsibilities.
- Will draw policy conclusions where consensus has been reached, and highlight the areas where more work is needed to get more granular policy advice.

### Major themes and findings
- Expanding objectives of monetary policy:
  - Reviews arguments for and against broadening central bank objectives beyond traditional inflation and output stabilization.
- Unconventional to conventional policies:
  - Assesses the merits of institutionalizing unconventional tools as part of regular policy toolkits.
- Zero-lower bound resilience:
  - Explores approaches to reduce the probability or impact of monetary policy being constrained by the zero-lower bound.
- Institutional and governance challenges:
  - Discusses preserving central bank independence in the context of new responsibilities.
  - Considers mechanisms for adequate government oversight related to those new responsibilities.
- Policy conclusions and gaps:
  - Intends to draw policy conclusions where consensus exists.
  - Identifies areas requiring further work for more granular policy advice.

### Subjects and keywords
- Subject: Banking, Central bank policy rate, Financial sector stability, Inflation, Zero lower bound
- Keywords: central bank, monetary policy, policy, policy rate, SDN

### Publication metadata and identifiers
- Pages: 49
- Volume: 2014
- Issue: 003
- Series: Staff Discussion Notes No. 2014/003
- DOI: https://doi.org/10.5089/9781475561784.006
- Stock No: SDNEA2014003
- ISBN: 9781475561784
- ISSN: 2617-6750

*Source: IMF Staff Discussion Note "Monetary Policy in the New Normal" (April 4, 2014).*

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- **_sdn1403**
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_Source: https://www.imf.org/en/publications/staff-discussion-notes/issues/2016/12/31/monetary-policy-in-the-new-normal-41419_