‘Run it hot’: the risks and rewards of a new policy era

Covid-19 has added impetus to an emerging intellectual shift in policy-making. But central banks face unresolved issues

Covid-19 has shaken economics, much as the preceding crises throughout history upended the thinking of the time. From the start, the pandemic pushed economists into the frontiers of the subject, from the use of high-frequency data to track the economy, to the merging of epidemiology and macroeconomics. But the crisis may also have added impetus to a deeper intellectual shift in economics that predated the virus.

Emblematic of this shift is the US Federal Reserve’s decision to adopt average

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here: http://subscriptions.centralbanking.com/subscribe

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: