FEDS Paper: Monetary Policy Strategy and the Anchoring of Long-Run Inflation Expectations

04/09/2025 Federal Reserve Central banks

Michael T. KileySince the 1990s, monetary policy research has highlighted the properties of policy rules that stabilize inflation and economic activity, the role of inflation targeting in anchoring expectations, and the constraints posed by the effective lower bound (ELB). This paper combines these themes by examining whether explicitly responding to long-run inflation expectations improves policy effectiveness.

Do central bank reforms lead to more monetary discipline?

04/09/2025 European Central Bank Central banks

This paper investigates the impact of reforms altering legal central bank independence (CBI) on monetary policy discipline and credibility, two key mechanisms shaping price stability. Using a sample of 155 countries over more than 50 years (1972–2023), we show that reforms improving CBI strengthen monetary discipline and the credibility of central banks. Larger reforms enhance monetary discipline with a lag, achieving their full effect after ten years. Central bank reforms have a greater impact on monetary discipline in countries that have not reversed earlier reforms.

Do central bank reforms lead to more monetary discipline?

04/09/2025 European Central Bank Central banks

This paper investigates the impact of reforms altering legal central bank independence (CBI) on monetary policy discipline and credibility, two key mechanisms shaping price stability. Using a sample of 155 countries over more than 50 years (1972–2023), we show that reforms improving CBI strengthen monetary discipline and the credibility of central banks. Larger reforms enhance monetary discipline with a lag, achieving their full effect after ten years. Central bank reforms have a greater impact on monetary discipline in countries that have not reversed earlier reforms.

Trade in the Time of Trump

04/08/2025 Ineteconomics Analysis

Trump ran in both 2016 and 2024 on a promise to reverse the deindustrialization caused by globalization and free trade, using tariffs as his main tool. But the critical question now is: Can it work?
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Trump thinks tariffs can bring back the glory days of US manufacturing. Here’s why he’s wrong

04/08/2025 The Conversation UK

The “liberation day” tariffs announced by US president Donald Trump have one thing in common – they are being applied to goods only. Trade in services between the US and its partners is not affected. This is the perfect example of Trump’s peculiar focus on trade in goods and, by extension, his nostalgic but outdated obsession with manufacturing.

Why Nato is struggling to rebuild itself in an increasingly threatening world

04/08/2025 The Conversation UK

In the years after Nato was formed in 1949, its US and European members had a collective approach to defence with clear goals in common, largely built around the protection of western Europe against the Soviet Union. Throughout this era, the US and Europe both relied on the stability of the international system by creating international cooperation on shared dilemmas.

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