The paradox of risk : leaving the monetary policy comfort zone / Ángel Ubide.

Includes bibliographical references (pages 271-283) and index.

For decades, economic policymakers have worshipped at the altar of combating inflation, reducing public deficits, and discouraging risky behavior by investors. That mindset made them hesitate when the global financial crisis erupted in 2007-08. Ubide's thesis is that central banks' fear of inflation and risk taking has hampered their efforts to revive global prosperity. In their confusion, he argues, policymakers made the recovery weaker. He calls on world leaders to abandon old shibboleths and learn the lessons from the financial crisis and its sluggish aftermath.

Introduction -- The Paradox of Risk -- Of Boring Central Bankers, "NICE" Economies, and the Power of Narratives -- Just Blame the Central Banks -- Roadmap of the Book -- The Future Is Not What It Used to Be -- The Intellectual and Political Background to the Crisis -- It All Started in the 1970s: The Anti-Inflation Consensus -- Deflation and Zero Interest Rates? That's Such a Japanese Thing -- The European Obsession with Competitiveness and Reforms -- The Diabolical Politics of Rescue Programs -- Lean versus Clean-or How the Deep Origin of the Crisis Lies in a Bathtub -- Bayesian Inference Meets Politicians in a Rush-and Austerity Is Born -- Markets and the Crisis: In Search of Analogues -- I Wouldn't Start from Here -- The Great Experiment in Monetary Policy: Central Bank Actions since 2007 -- Conventional versus Unconventional Monetary Policy -- How to Do Monetary Policy? Goals, Tools, Strategies, and Communication -- Policy Goals: Is Clarifying Price Stability Enough? -- Policy Tools -- Policy Strategies: Forward Guidance to Sell Insurance on the Economic Outlook -- Policy Communication: Opening the Doors of the Temple -- Do or Do Not. There Is No Try -- Has Monetary Policy Worked? Yes, No, Maybe -- Did Monetary Policy Decisions Affect Financial Conditions in the Expected Way? -- Did Policies Ease to the Extent Recommended by Simple Benchmark Rules? -- Did Policies Achieve Their Objectives in Terms of Inflation and Growth? -- Has Monetary Policy Had Any Negative Side Effects? -- Monetary Policy Worked-But It Can Do Better -- Have We Learned Anything? Crafting a Monetary Policy for All Seasons -- Goals: A Program of Opportunistic Reflation -- Tools: Be Ready to Use All the Tools at All Times -- Strategies: Adopt Cyclically Adjusted Forward Guidance -- Communication: Stop Calling It Unconventional -- Institutional Design: Financial Stability as Part of Central Banking, Not Monetary Policy -- A Game Plan for the Future -- Conclusion: The Future Is Not What It Used to Be -- The Brexit Easing -- The Resetting of Abenomics -- The Trump Surprise -- Fiscal Policy in the Lead -- It's All about Risk Management.