In his speech, Alan Taylor discusses how central bank mandates have evolved over the past decades and how they deal with large shocks. He then explains how his votes are grounded in the Monetary Policy Committee’s remit.
Speech
Introduction
What are central bank mandates for? And how should they evolve?
Mandates are, at their most abstract, but also at their best, devices that align a specialised public institution with the aims that society cares about. When it comes to the key responsibilities of central banks, the public’s aims are straightforward to state but hard to deliver: price stability in support of economic prosperity.
In terms of macroeconomic measurement, those objectives often translate into low inflation and unemployment, robust and sustainable growth, and financial stability and an absence of deep recessions.
A sceptic might call this a tall order. Macroeconomic history, however, shows that while we have fallen short at certain times, we have also had periods of considerable success, reminding us that the right institutional scaffolding can make a meaningful difference.
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