On 12th November, PEF launched a new paper on the scope and operations of the Bank of England’s monetary policy written by Jan Toporowski (Professor of Economics and Finance, SOAS, University of London) and Jo Michell (Associate Professor in Economics, UWE Bristol).
The main finding of the paper is that, whereas the ability of the Bank to control inflation is itself questionable, the effectiveness of the Bank’s open market operations in regulating the liquidity of the banking and financial system is demonstrated by Quantitative Easing. The paper argues for giving the Bank of England an enhanced financial stability mandate in the form of a target to conduct open market operations to keep the yield curve stable.
Responding to the paper, Professor Anastasia Nesvetailova (Director of City Political Economy Research Centre) emphasised broad agreement with its arguments but suggested reforms to the Bank could go further. Dr Angus Armstrong (Director of Rebuilding Macroeconomics) and Professor John Weeks (PEF Council Coordinator) also responded to the paper, with John arguing against central bank
After this, there was a discussion and Q&A on the paper’s findings chaired by Patrick Allen (Chair, PEF). Frances Coppola raised questions about the case for demand-side measures to boost the economy. Robert Skidelsky (PEF Council member and Crossbench Peer) suggested that if the Bank were to play a less hands-on role in the economy then there would need to be a stronger focus on fiscal policy.
The full report can be read here.
You can view the full album of photos of this event on our Flickr here. Photo credit: Flickr/Dun.can.
