Goals and conduct of monetary policy discussed in presidential address

In his presidential address to the Economic Society of South Africa's Annual General Meeting in Johannesburg during September 2012, Professor Stan du Plessis discussed the goals and instruments of monetary policy. According to Du Plessis, an extraordinary consensus on the goals and conduct of monetary policy has been undermined by the international financial crisis and the faltering recovery in many economies. There is an evident need to pay closer attention to developments of asset markets and in the financial sector, which has opened a discussion on the appropriate goals for monetary policy. Meanwhile, central banks have employed controversial balance sheet operations to restore market stability and encourage economic recovery. He argues that both these developments reflect earlier concerns in monetary policy: prior to the modern consensus both balance sheet policies and an emphasis on financial stability were central concerns of monetary authorities and the future of monetary policy is likely to rhyme with its past. Download the Working Paper here.