New taxonomy of operating frameworks from BIS economists
Two-dimensional approach captures “surprising similarities” between different methods
Economists at the Bank for International Settlements have developed a new way of categorising the frameworks central banks use to set monetary policy. The authors say their approach gives a clearer view of the differences between frameworks – and illustrates “surprising similarities” in some cases.
The article, which forms part of the BIS quarterly review published today (September 15), breaks operating frameworks down along two dimensions: the “marginal opportunity cost” to banks of holding
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