Re-imagining Central Banking

  • Perry Mehrling
Part of the International Economic Association Series book series (IEA)


The urgency of the task obviously arises from the experience of the global financial crisis, during which central banks intervened in dramatically new ways and to a dramatically greater degree than ever before, at least in peacetime. Central banks invented new tools on the fly, because the familiar old tools were not working. Now the crisis is over comes the important intellectual task of understanding how these new things fit within the standard pre-crisis toolkit. Just so, Borio and Disyatat (2009) distinguish between the old “interest rate policy” and the new “balance sheet policy”, urging us to understand the latter as, on the one hand, nothing more than an extension of traditional techniques of FX intervention to a broader asset class and, on the other hand, nothing less than use of the central bank balance sheet to implement debt management policy that is more traditionally undertaken by the Treasury. The present paper can in part be understood as a critical but sympathetic reconsideration of this early appraisal.


Monetary Policy Central Bank Balance Sheet Credit Default Swap Money Market 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


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Copyright information

© Perry Mehrling 2016

Authors and Affiliations

  • Perry Mehrling
    • 1
    • 2
  1. 1.Institute for New Economic ThinkingUSA
  2. 2.Barnard CollegeColumbia UniversityUSA

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