60th SUERF Anniversary & 50th OeNB Annual Economic Conference
Monetary policy in uncertain times: Towards robustness and resilience
Motivation
Monetary policy strategy reviews conducted in the early 2020s by several central banks were informed by a persistent undershooting of inflation targets. A key aim was thus to ensure the effectiveness of monetary policy at the effective lower bound on interest rates, and to bring inflation and inflation expectations back up to target. Given the dramatic overshooting of inflation above target starting from 2021, the question arises whether the analyses made at the time were overly focused on a particular state of the world and failed to be robust to the possibility of dramatically and fast-changing circumstances. The current environment is characterized by higher volatility and higher uncertainty and has shown how large and sudden shocks in a matter of months can sharply change economic and financial conditions, not only locally but also globally. The conference aims to explore avenues to render central banks’ strategies and analytical tools more robust and resilient to unexpected changes in the conditions under which they may need to operate. How to make monetary policy decisions robust and resilient to uncertain outcomes. And how to tailor central bank communication to high inflation and high uncertainty? Call for Papers (pdf)
| Monday, 22 May 2023 | |
| 12:30 | Standing lunch |
| 13:30 | Welcome remarks |
Robert Holzmann, Governor, Oesterreichische Nationalbank Jakob de Haan, SUERF President I Professor, University of Groningen |
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| 13:45 | Opening keynote |
Robustness and resilience in an uncertain and complex world: implications for monetary policy Moderated by Jakob de Haan, SUERF President |
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| 14:30 | Session 1 - Shock identification and optimal monetary policy responses in an uncertain and complex environment |
How to correctly identify the nature of shocks, their duration, their relative strength (e.g. supply versus demand), and their transmission in an increasingly complex environment? What lessons have we learned during the Covid and energy crises to improve our tools? Would such improvements change monetary policy strategies and the conduct of monetary policy? |
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Moderator: Ernest Gnan, SUERF Secretary General Sandra Eickmeier, Research Economist, Economic Research Center, Deutsche Bundesbank Boris Hofmann, Research Adviser, Monetary and Economic Department, BIS Adrian Penalver, Deputy Director, Monetary and Financial Studies, DG Statistics, Economics and International, Banque de France Raffaella Giacomini, Professor, UCL; Economic Advisor, Federal Reserve Bank of Chicago |
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| 15:45 | Break |
| 16:15 | Policy Panel: The Great Volatility: How to cope? What is different this time? How to manage side effects and tradeoffs? |
Controlling inflation in a volatile and uncertain environment requires not only good forecasting models but also implementation robust to rapid changes in economic conditions. How to make monetary policy robust to uncertain outcomes How to deal with risks for fiscal sustainability and financial stability? How to preserve central bank credibility in a volatile environment and at the same time secure public acceptance, given difficult tradeoffs? Does this require central banks to expand their policy tool kit even further? Are there asymmetries between monetary policy easing and tightening, and if so, what would such asymmetries imply in a longer-term perspective? |
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Moderator: Robert Holzmann, Governor, Oesterreichische Nationalbank Tobias Adrian, Financial Counsellor and Director, Monetary and Capital Markets Department, IMF Claudio Borio, Head of the Monetary and Economic Department, BIS I SUERF Fellow Sarah Breeden, Executive Director, Bank of England Philip Lane, Member of the Executive Board, ECB |
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| 17:45 | End & Replay - Day 1 "Monetary policy in uncertain times" |
| 19:00 | Dinner and Dinner speech |
How to deal with extreme uncertainty in an interconnected world? An investor perspective Moderated by Robert Holzmann, Governor, Oesterreichische Nationalbank |
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Welcome remarks (pdf)| Tuesday, 23 May 2023 | |
| 09:00 | Academic session 1: Prices, wages and expectations |
Moderator: Fabio Rumler, Senior Principle, Oesterreichische Nationalbank Paper: Undesired consequences of calvo pricing in a non-linear world - pdf Paper: A single monetary policy for heterogeneous labour markets: the case of the euro area - pdf Paper: Price setting frequency and the Phillips curve - pdf |
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| 10:30 | Break |
| 10:45 | Academic session 2: Monetary policy transmission and implementation |
Moderator: Claudia Kwapil, Principal Economist, Oesterreichische Nationalbank Paper: Nonbank lending and the transmission of monetary policy - pdf Paper: Financial panics and liquidity interventions - pdf Paper: Building central bank credibility: The role of forecast performance - pdf Paper: Pushing risky firms on a string: Asymmetric effects of monetary policy - pdf |
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| 12:15 | Standing Lunch |
| 13:00 | Session 2 - Fiscal and monetary policy interactions: side effects, tradeoffs and complementarities, need for coordination? |
The nature, number and size of current shocks and the strong policy measures required highlight potential side effects, spill-overs and tradeoffs. The session focuses on monetary and fiscal interactions. How can monetary and fiscal policies interact optimally to achieve complementarities and synergies? Which strategies to follow without coordination? |
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Moderator: Maria Teresa Valderrama, Head of Monetary Policy Section, Oesterreichische Nationalbank Dennis Bonam, Principal Economist, Economic Policy and Research Division, De Nederlandsche Bank Sven Langedijk, Advisor, Directorate-General for Economic and Financial Affairs, European Commission Aaron Mehrotra, Principial Economist, BIS Francesco Papadia, Senior Fellow, Bruegel |
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| 14:15 | Keynote Lecture |
Central banks as risk managers: long-term side-effects, risks and limitations Moderated by Gottfried Haber, Vice Governor, Oesterreichische Nationalbank |
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| 15:00 | Break |
| 15:30 | Session 3 - Monetary policy communication in uncertain times |
Large and multiple shocks and high uncertainty go hand in hand with the risk of volatile and diverse perceptions and expectations of the economic outlook and policy responses. How should central banks communicate to stabilize and anchor expectations instead of contributing to uncertainty? Can communication about the central bank’s reaction function in lieu of forward guidance accomplish this? How to preserve/reestablish credibility once inflation has been above target for an extended period? How to design communication that is robust to volatile events? |
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Moderator: Birgit Niessner, Director of Economic Analysis and Research Department, Oesterreichische Nationalbank Klodiana Istrefi, Senior Economist, ECB Michael McMahon, Professor of Economics, University of Oxford Emanuel Moench, Professor, Frankfurt School of Finance & Management | SUERF Kilian Rieder, Principal Economist, Oesterreichische Nationalbank | SUERF |
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| 17:00 | Concluding remarks |
Barbara Kolm, Vice President, Oesterreichische Nationalbank |
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| 17:15 | End & Replay - Day 2 "Monetary policy in uncertain times" |
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