Monetary policy through asset markets: lessons from unconventional measures and implications for an integrated world
The global financial crisis of 2008 and its aftermath brought many new challenges for the world’s central banks. These new challenges have resulted, in turn, in bold experimentation—not just the vigorous application of traditional policy tools, but the use of new ones, or at least ones that were rarely resorted to in the decades leading to the crisis. Now that the most urgent stages of the crisis are in the past, the central banks of many countries need to take stock of the lessons learned during this period of experimentation. To what extent have we learned that, at least during times of crisis, the central bank’s toolkit should be bigger than the one that was regarded as sufficient during the years of the “Great Moderation”? To what extent have we learned the uses of additional tools that should become routine aspects of the conduct of monetary policy, even when the financial sector is not subject to unusual stress? What do we know about the effects of using these new tools, and what role should they play in the years to come? The nineteenth annual conference of the Central Bank of Chile conference series addresses these issues, bringing together a distinguished multinational group of scholars to discuss the latest research findings. The structure of the conference consists of three sessions, each addressing a different aspect of the new issues raised by the unconventional monetary policies of recent years.Monetary policy thorugh asset markets: lessons from unconventional measures and implications for an integrated world: an overview / Elias Albagli, Diego Saravia, Michael Woodford -- Forward guidance in hte yield curve: short rates versis bond supply / Robin Greenwood, Samuel G. Hanson, Dimitri Vayanos -- Bernanke's no-arbitrage argument revisited: can open market operations in real assets eliminate the liquidity trap? / Gauti B. Eggertsson, Kevin Proulx -- Measuring the effects of unconventional monetary policy on asset prices / Eric T. Swanson -- Risk premium shifts and monetary policy: a coordination approach / Stephen Morris and Hyun Song Shin -- Quantitative easing and financial stability / Michael Woodford -- Short-term interest rates and bank lending terms: evidence from a survey of U.S. loans / Giovanni Dell'Ariccia, Luc Laeven, Gustavo Suarea -- The response of sovereign bonds yields to U.S. monetary policy / Simon Gilchrist, Vivian Z. Yue, Egon Zakrajsek -- U.S. monetary spillovers to Latin America: the role of long-term interest rates / Elias Albagli, Danilo Leiva-Leon, Diego Saravia.