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Monetary policy in uncertain times: Towards robustness and resilience

60th SUERF Anniversary & 50th OeNB Annual Economic Conference

Monetary policy in uncertain times: Towards robustness and resilience

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
Welcome remarks (pdf)Welcome remarks (pdf)

Jakob de Haan, SUERF President I Professor, University of Groningen

13:45 Opening keynote

Robustness and resilience in an uncertain and complex world: implications for monetary policy
Markus Brunnermeier, Professor, Princeton University
Presentation (pdf)Presentation (pdf)

Moderated by Jakob de Haan, SUERF President

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?

Moderator: Ernest Gnan, SUERF Secretary General

Sandra Eickmeier, Research Economist, Economic Research Center, Deutsche Bundesbank
Presentation (pdf)Presentation (pdf)

Boris Hofmann, Research Adviser, Monetary and Economic Department, BIS
Presentation (pdf)Presentation (pdf)

Adrian Penalver, Deputy Director, Monetary and Financial Studies, DG Statistics, Economics and International, Banque de France
Presentation (pdf)Presentation (pdf)

Raffaella Giacomini, Professor, UCL; Economic Advisor, Federal Reserve Bank of Chicago

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?

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

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
Philipp Hildebrand, Vice Chairman, BlackRock

Moderated by Robert Holzmann, Governor, Oesterreichische Nationalbank

Tuesday, 23 May 2023
09:00 Academic session 1: Prices, wages and expectations

Moderator: Fabio Rumler, Senior Principle, Oesterreichische Nationalbank

Paper: Inflation persistence, noisy information and the Phillips Curve  - pdf
José-Elías Gallegos, Banco de España

Paper: House price expectations and inflation expectations: evidence from survey data - pdf
Roshni Tara, University of Surrey
Co-author(s): Vedanta Dhamija, Ricardo Nunes, University of Surrey

Paper: Undesired consequences of calvo pricing in a non-linear world - pdf
Aleš Maršál, National Bank of Slovakia
Co-author(s): Katrin Rabitschz, WU Vienna, Lorant Kaszab, Magyar Nemzeti Bank

Paper: A single monetary policy for heterogeneous labour markets: the case of the euro area - pdf
Matija Lozej, Central Bank of Ireland
Co-author(s): Sandra Gomes, Bank of Portugal, Pascal Jacquinot, ECB

Paper: Price setting frequency and the Phillips curve - pdf
Alex Grimaud, Vienna University of Economics and Business
Co-author(s): Emanuel Gasteiger, TU Wien

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
Denis Gorea, European Investment Bank
Co-author(s): Dominic Cucic, Danmarks Nationalbank

Paper: Financial panics and liquidity interventions - pdf
Alexander Haas, University of Oxford
Co-author(s): Derrick Kanngiesser, Bank of England

Paper: Building central bank credibility: The role of forecast performance - pdf
Ryan Rholes, University of Oxford

Paper: Pushing risky firms on a string: Asymmetric effects of monetary policy - pdf
Ander Perez-Orive, Federal Reserve Board
Co-author(s): Yannick Timmer, Federal Reserve Board

12:15 Standing Lunch
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?

Moderator: Maria Teresa Valderrama, Head of Monetary Policy Section, Oesterreichische Nationalbank

Dennis Bonam, Principal Economist, Economic Policy and Research Division, De Nederlandsche Bank
Presentation (pdf)Presentation (pdf)

Sven Langedijk, Advisor, Directorate-General for Economic and Financial Affairs, European Commission
Presentation (pdf)Presentation (pdf)

Aaron Mehrotra, Principial Economist, BIS
Presentation (pdf)Presentation (pdf)

Francesco Papadia, Senior Fellow, Bruegel
Presentation (pdf)Presentation (pdf)

14:15 Keynote Lecture

Central banks as risk managers: long-term side-effects, risks and limitations
Jon Danielsson, Director of the Systemic Risk Centre, The London School of Economics and Political Science
Presentation (pdf)Presentation (pdf)

Moderated by Gottfried Haber, Vice Governor, Oesterreichische Nationalbank

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?

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

17:00 Concluding remarks

Barbara Kolm, Vice President, Oesterreichische Nationalbank

17:15 End & Replay - Day 2 "Monetary policy in uncertain times"


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