New tasks for central bankers

Abstract

Before the vast expansion of public sector operations, fiscal policy was not fully understood and not very relevant. Managing the internal activity and the external balance was only possible through monetary policy. Today, monetary policy is instead taken to officially confirm private guesses about the economy or even to be of little consequence all together. The article considers three main reasons why the economy has become considerably more stable, and why monetary policy may have a less direct impact than in the past. JEL: E52, E58, E62

Keywords

• Central banking
• fiscal policy
• monetary policy