The Great Moderation and the New Normal
In this second part of Frances's video on central banks, she covers some of the history that shaped the role they hold today, including the Great Moderation and the financial crisis.
Overview
The financial crisis caused a dramatic shift in monetary policy. Prior to the financial crisis, central banks used interest rate policy to control inflation. Since then, more unconventional forms, such as QE have had a huge impact on the global economy. However, central banks are now demanding an entire change of emphasis, suggesting that governments should share responsibility in restoring the economy.
Key learning objectives:
What is the Great Moderation?
Identify the monetary policy utilised pre and post-crisis
What should central banks do next?
Summary
Expert
Frances Coppola
Frances has spent 17 years working for assorted banks, retail and investment banks, and even a charity. During her banking career she designed risk management systems for Nat West, and financial & regulatory reporting systems for Midland Bank (now HSBC) and RBS Group. In 2019, she published a book on “people’s quantitative easing”.
