Should SSA countries consider more heterodox policies? Successful emerging market economies have often employed an eclectic range of economic policies, in areas such as exchange rate management and financial sector policy. Policymakers in SSA can learn from their experience. This experience suggests that there is scope for expanding the set of feasible policy choices available in SSA. I will highlight three examples.
The financial crisis has not brought about any change in this fundamental assessment: contrary to the fears of some critics, the non-conventional monetary policy measures taken by the ECB had exactly the desired effect, even in an environment of temporarily negative inflation rates, so that they can now – given the normalisation of the outlook for inflation and the prospect of a general market recovery – be phased-out, step by step.