This example links nicely to the current need of better policy coordination and collaboration in today’s world of growing global integration and interconnectedness through trade and financial links than ever. The topic of today’s session “policy discipline and spillovers in an interconnected global economy” is therefore extremely timely both from a global and European perspective.
The paper notes the role of central bank credibility in managing disinflations, but I do not attribute the persistence in inflation to a lack of Fed credibility. Indeed, there is evidence in support of central bank credibility, including that long-term inflation expectations are not far from the FOMC’s 2 percent target. Let me conclude with a summary of my takeaways.