A New Era of Monetary Policymaking in the Light of the Post-Crisis Challenges

Abstract

Abstract. Within appearing the global financial crisis, standard macroeconomic approaches, in particular, monetary policies conducted prior to global recession have become targets of harsh criticism because of their weakness against these imbalances. The recession was a consequence of multiple factors including excessive private and public debt, poor financial surveillance and incapability of institutional structure to cope with potential risk sources. However, due to the nature of the recession, monetary authorities have been accused much more because of uncertainties relating to their mandates, weakness of their precautionary signaling and also time-inconsistency problems of policy transmission channels.In addition, because of limited effects of both conventional and unconventional measures, the urgent need to revise mandates of monetary authorities and totally the nature of monetary policy is the topic attracting significant attention. In this context, reassessment of cardinalshifting in monetary policies and implementation of fundamental realignments to the conventional central banking conception can be noted as challenges of post-crisis period. Keywords. Monetary policy, Central banking, Financial crisis, Unconventional measures, Financial stability. JEL. E52, E58, G01.