Mester wants new models to get to grips with policy nexus

Loretta Mester
Loretta Mester

Federal Reserve Bank of Cleveland president Loretta Mester has called on academics to develop new models to better understand the nexus between monetary policy and financial stability.

Mester told an audience in Reykjavik, Iceland, that structural and cyclical macro-prudential tools "show promise" but warned "their performance is largely untested", echoing the European Central Bank's Yves Mersch whose comments, on May 18, highlighted the need for more research.

The Cleveland Fed president believ

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