Sir, Your editorial “Central bankers ponder moving the goalposts” (August 26) may miss the point. Debate over “more tools or a new framework” critically depends on an assumption that an effective policy space remains for central banks in the rich world. I don’t think it does.
As Benoît Coeuré, a member of the European Central Bank executive board, indicated in July — and as the Bank of Japan’s decision to conduct a comprehensive assessment of its own policy implied — monetary policy in the US, Europe and Japan seems to be facing an economic lower limit, beyond which further accommodation becomes ineffective or even causes unintended negative effects on the economy and the financial markets.
I think that Jackson Hole should be a place where central banks admit the limit of their capability more clearly and even call a “monetary policy moratorium”. After creative and massive efforts by central banks, it is statesmen who now should deal with new economic environment.
Mizuho Research Institute,
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