
Contents
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The Backdrop The Backdrop
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The Way It Was The Way It Was
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A Turn for the Worse A Turn for the Worse
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A Bird’s Eye View of Global Macroeconomic Activity and Institutional Developments A Bird’s Eye View of Global Macroeconomic Activity and Institutional Developments
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Central Bank Deeds and Words Central Bank Deeds and Words
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Macroeconomic Performance Indicators Macroeconomic Performance Indicators
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The Forward-Looking Side of Monetary Policy The Forward-Looking Side of Monetary Policy
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Financial Asset Prices Come into View Financial Asset Prices Come into View
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Global Indicators Global Indicators
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Central Bank Balance Sheets Enter the Picture Central Bank Balance Sheets Enter the Picture
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Central Bank Independence and Transparency Central Bank Independence and Transparency
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Conclusions Conclusions
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Cite
Abstract
This chapter provides an overview of the macroeconomic environment since 2000. The era is broken down into three periods: 2000–2006, 2007–2010, and 2011–present. Warnings of an imminent crisis were present before 2007, but generally they were ignored by self-satisfied policymakers. Pre-crisis, inflation control was the once rising and, seemingly, preeminent monetary policy strategy. A review, both pre- and post-GFC, of a wide variety of macroeconomic and financial indicators is included, with discussion of lesser known variables such as proxies for central bank communication and balance sheet indicators. These clearly enable us to identify interventions by central banks while also highlighting areas of continuing concern. In some respects (e.g. concerns about financial stability), everything has changed post-crisis, but in other respects (e.g. monetary policy strategy) fewer changes are apparent. The chapter concludes by arguing that there are reasons to be apprehensive about the current state of monetary policy and central banking.
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