This would call for unprecedented central bank action at the limit of policy mandates in response to exceptional and exigent circumstances.
Overall, the seeds of vice in the relationship between monetary policy and globalisation in recent years – including complacency, underappreciation of monetary and credit dynamics and the confusion of “known knowns” with “known unknowns” – have a common thread: the potential for unintended consequences. I would therefore like to outline some of the challenges we may expect in this context in the period ahead.