The key role of money, both before and during the crisis, has been to maintain a focus on developments in nominal trends at lower frequencies. The case for monetary policy strategies oriented towards the medium term In this context let me elaborate the case for monetary policy strategies oriented towards the medium term.
You may ask “but isn’t this exactly what central banks around the world have been pursuing for the past two decades?” Well, perhaps or perhaps not. Five years ago, at the Jackson Hole conference, for example, former Fed Vice Chairman Alan Blinder described US monetary policy since the late 1980s in terms of the “resurrection of finetuning”.