Myths of Monetary Policy
I would like to address four interrelated topics, on which the central banking community
has been known to pronounce:
- the one instrument, one-target story about money and inflation;
- the no-long-run tradeoff story that morphs into a no short-run tradeoff story;
- the problem of the exchange rate for small, open economies;
- and asset prices, financial stability and macro-prudential supervision.