Unconventional Monetary Policy

Prerequisites: SIPA U6401 Corequisites: INAF U6018 & INAF U6022 The course begins with a review of central banks monetary policy goals and objectives, followed by an overview of how central banks set and implement monetary policy in normal economic and financial market conditions. The bulk of the course will focus on how central banks adapt their policy rules and tools in the face of extraordinary financial market or economic turmoil. Different types of unconventional tools will be discussed and analyzed, with particular focus on the design and the effectiveness of various unconventional policy tools. Examples of the use unconventional policy tools - both more and less successful - across jurisdictions will be discussed in the latter half of the course. The course finishes with discussions of several important, and timely dilemmas: where is the ;line; between unconventional monetary policies and traditional fiscal policy actions; what difficulties do central banks face in handling economic side effects and the political consequences of extraordinary policy, and what are the challenges of returning monetary policy to (a new) normal.