How Monetary Policy Strategies Changed After The Global Financial Crises?

Abstract

The aim of this paper is to analyze the main monetary policy shifts of central banks before and after the crisis and to see their impacts on monetary policy and communication strategies. In this regard, a number of central banks from developed and developing countries have been chosen and analyzed in terms of their monetary policy changes and especially their communication strategies. The research is based on a literature review and a holistic, multiple method case studies, drawing on websites, a primary communication tool for central banks, and on the basic reports on their websites. We also benefit from the survey commentaries of the BIS conducted in 2013. While central banks in developed economies try to minimize the negative impacts of global financial crises they started to use unconventional policies such as quantitative easing, negative interest rate policy and forward guidance. On the other hand central banks in developing countries not only try to minimize the negative impact of crisis on the economy but also deal with the negative effects of the unconventional monetary policies from developed economies. To achieve that goal, they mostly started to implement macro-prudential measures. What is common in developing and developed countries during and after the global crisis is that they increased the awareness of financial stability and established new financial stability bodies and included financial stability in their policy mix. To do this some of them has changed their law and even their organizational structure.