1. When Central Banks Surprise: Why It Is Important and What Policy Makers Need to Do about It
- Author:
- Domenico Lombardi, Pierre Siklos, and Samantha St. Amand
- Publication Date:
- 01-2015
- Content Type:
- Working Paper
- Institution:
- Centre for International Governance Innovation
- Abstract:
- There is a risk that positive developments in the US economy and in the US Federal Reserve's monetary policy stance could induce global financial volatility and further exacerbate global economic imbalances. Empirical evidence suggests that global asset prices are responsive not just to US policy actions, but to news events concerning developments in the US economy and to the tones of Federal Reserve statements. Central banks need to continue to be mindful about the potential repercussions of shocking markets through statements and policy actions. The Group of Twenty (G20) ought to work together to implement coordinated, mutually beneficial economic policies. This includes being cognizant of the spillover effects of domestic policies, and seeking to minimize them.
- Topic:
- Monetary Policy
- Political Geography:
- United States