This prideful interpretation amounted to the siren song of an extremely accommodative monetary policy. Unable to disentangle the global and domestic pressures suppressing inflation, a price targeting Fed has erred consistently on the side of easy money.

Besides structural reforms, building new momentum will require pulling all possible levers that can support global demand. Accommodative monetary policy will remain essential for as long as growth remains anemic though we must pay careful attention to potential spillovers.

Policy would still be accommodative if the Fed maintained low interest rates rather than the zero level that was appropriate for a panic. And this would give savers less of an incentive to search for yield, thus avoiding financial instability.

The disinflation and ample liquidity created by the accommodative monetary policy of central governments have driven the market interest rates down to the extent that the fixed income markets no longer offer the returns that investors have enjoyed in the past.

For example, while annual inflation stood at 0.8 in December 2014, the minutes of the January 2015 FOMC meeting refer several times to the Committee s need to make progress toward its objectives of maximum employment and 2 inflation by maintaining a highly accommodative policy stance. Increasing the rate of inflation is now the stated objective of Fed policy.

The ramifications for interest rate spreads, emerging market equities, and housing demand, among much else, are the subject of widespread debate. But, as markets learn to cope with a less accommodative monetary policy, there could be an important silver lining, which most people have ignored.

First, it is important to acknowledge that weak aggregate demand and anemic economic growth, not an acceleration in the labor displacement rate, explains the slow jobs growth of the last decade. Under these conditions, monetary policy should remain accommodative and further fiscal austerity should be eschewed.

It would be a different matter if we were to decide to buy bonds issued by euro area sovereigns the only market where size would generally not be an issue. Interventions in this market would likely entail a stronger signal that the ECB is committed to maintaining an accommodative monetary policy for an extended period of time.

This argument has proved convincing in policy and political circles, leading officials to focus on a new approach centered on so called macro prudential tools, including capital requirements and leverage ratios, to curb excessive risk taking by banks. While this approach has some merit, it is incomplete, as it fails to address the egregious mispricing of risk brought about by an overly accommodative monetary policy and the historically low interest rates that it generated.

US Federal Reserve Chair Janet Yellen was a vocal co architect of the Fed s accommodative policy stance under the leadership of her predecessor, Ben Bernanke, so policy continuity is expected. Indeed, the Fed has reiterated its intention to hold the federal funds rate near zero well past the time that the unemployment rate falls below 6.5 , while gradually trimming its purchases of long term assets so called quantitative easing by 10 billion a month.

Despite legitimate questions about the effectiveness of its unconventional and ever experimental policy stance, the Fed appears willing to be even more activist if the economy weakens. Indeed, if the Fed makes an inadvertent mistake (the likelihood of this is considerable, given the country s complex situation and the unusually uncertain outlook), it is more likely to err on the side of staying accommodative for too long, rather than tightening monetary policy prematurely.

For the US, the combination of a stronger economy and less accommodative monetary policy will put additional upward pressure on the dollar s exchange rate which has already appreciated significantly against both the euro and the yen. With few other countries willing to allow their currencies to strengthen, the dollar s tendency toward appreciation will remain strong and broad based, potentially triggering domestic political opposition.

And we know how to do that accommodative monetary policy fiscal adjustment in all advanced economies that includes concrete and realistic plans to reduce debt over the medium term, but does not undercut short term growth completing the banking sector cleanup and reforms to boost productivity and growth potential. All of this should be complemented by a rebalancing of global demand toward dynamic markets, including emerging economies.

Similarly the National Health Policy and the National Education Policy also involved NGOs not only at the policy formulation but also policy implementation phase.

Policy

Policy

Policy

Policy

Policy

The various themes of the framework included trade policy, competition policy, investment policy, tax policy, corporate governance, public governance, infrastructure development and human resources development.

And that leverage much of it the result of monetary expansion in most of the world s advanced economies is not even serving the goal of boosting long term aggregate demand. After all, accommodative monetary policies can, at best, merely buy time for more durable sources of demand to emerge.

Fiscal policy was left as the only countercyclical policy option.

Replace provide policy guidance with provide support for policy development

Replace provide policy guidance with provide support for policy development

In the past two years some significant policy instruments have been introduced, such as the Governmental Water Resource Policy (2004), the National Policy for Integral Solid Waste Management (2004), the National Environmental Education Policy (2004), the National Fire Management Policy (2005) and the Soil Conservation Policy (ongoing).

Publications policy

Privacy Policy

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Public policy

Policy issues

Policy Crimes

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Policy conclusions

Policy framework

Policy guidance

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Grants policy

Aliens policy

Municipal policy

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Trade policy

Economic policy

Policy Development

Policy context