Volume 16, Number 1 February 2020 oue1,Nme February 2020 Volume 16, Number 1 INTERNATIONAL JOURNAL OF CENTRAL BANKING

INTERNATIONAL JOURNAL OF CENTRAL BANKING

rve System Con Rese feren eral ce o ed munication Practi n : F Com ces Mo ue nd (A F ne ss , a ed ta l I ls L ry a oo is P ci T te o e , n l p gy s ic S te E y a ve tr Introduction n S t) The Federal Reserve’s Current Framework for Monetary Policy: A Review and Assessment Janice C. Eberly, James H. Stock, and Jonathan H. Wright Global Dimensions of U.S. Monetary Policy Maurice Obstfeld Monetary Policy Strategies for the Federal Reserve Lars E.O. Svensson Are QE and Conventional Monetary Policy Substitutable? Eric Sims and Jing Cynthia Wu Financial Stability Considerations and Monetary Policy Anil K. Kashyap and Caspar Siegert International Journal of Central Banking

Volume 16, Number 1 February 2020

Special Issue: Federal Reserve System Conference on Monetary Policy Strategy, Tools, and Communication Practices (A Fed Listens Event)

Introduction 1

The Federal Reserve’s Current Framework for Monetary Policy: 5 A Review and Assessment Janice C. Eberly, James H. Stock, and Jonathan H. Wright

Global Dimensions of U.S. Monetary Policy 73 Maurice Obstfeld

Monetary Policy Strategies for the Federal Reserve 133 Lars E.O. Svensson

Are QE and Conventional Monetary Policy Substitutable? 195 Eric Sims and Jing Cynthia Wu

Financial Stability Considerations and Monetary Policy 231 Anil K. Kashyap and Caspar Siegert

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ISSN: 1815-4654 International Journal of Central Banking

Board of Directors Chairman Richard Clarida, Federal Reserve Board

Board Members Elias Albagli, Central Bank of Chile Emanuel M¨onch, Deutsche Bundesbank Ahmed Alkholifey, Saudi Arabian Monetary Authority Gerard O’Reilly, Central Bank of Ireland David E. Altig, Federal Reserve Bank of Atlanta Eva Ortega, Bank of Spain A¨ımene Benabderrahmane, Bank of Algeria Fabio Panetta, Bank of Italy Jan Marc Berk, The Nederlandsche Bank Michael D. Patra, Reserve Bank of India Claudio Borio, Bank for International Settlements Th´orarinn G. P´etursson, Central Bank of Iceland Jan Bruha, Czech National Bank Manuel Ramos Francia, Bank of Mexico Paul Castillo, Central Reserve Bank of Peru Sigal Ribon, Bank of Israel Lillian Cheung, Hong Kong Monetary Authority Kasper Roszbach, Norges Bank Keen Meng Choy, Monetary Authority of Singapore Glenn Rudebusch, Federal Reserve Bank of San Laurent Clerc, Bank of France Francisco Francisco G. Dakila Jr., Bangko Sentral ng Pilipinas Krislert Samphantharak, Bank of Thailand Troy Davig, Federal Reserve Bank of Kansas City Lawrence Schembri, Bank of Canada Michael Dotsey, Federal Reserve Bank of Philadelphia Toshitaka Sekine, Bank of Japan Luci Ellis, Reserve Bank of Australia Woon Shin, Bank of Korea Philipp Hartmann, European Central Bank Ulf S¨oderstr¨om, Sveriges Riksbank Jonathan Heathcote, Federal Reserve Bank of Daniel Sullivan, Federal Reserve Bank of Chicago Minneapolis Ellis Tallman, Federal Reserve Bank of Cleveland Beverly Hirtle, Federal Reserve Bank of New York George Tavlas, Bank of Greece Elena Iorga, National Bank of Romania Geoff Tootell, Federal Reserve Bank of Boston Esa Jokivuolle, Bank of Finland Dobieslaw Tymoczko, National Bank of Poland Ali Hakan Kara, Central Bank of Turkey Hernando Vargas Herrera, Banco de la Rep´ublica Signe Krogstrup, Danmarks Nationalbank Christopher Waller, Federal Reserve Bank of Michael Kumhof, Bank of England St. Louis Thomas Laubach, Federal Reserve Board John Weinberg, Federal Reserve Bank of Richmond Ana Christina Leal, Bank of Portugal Rafael Wouters, National Bank of Belgium Carlos Lenz, Swiss National Bank Mine Y¨ucel, Federal Reserve Bank of Dallas Eduardo Lima, Central Bank of Brazil Ksenia Yudaeva, Central Bank of Russian Ye Liu, People’s Bank of China Federation John McDermott, Reserve Bank of New Zealand Editorial Board Managing Editor Luc Laeven European Central Bank

Co-editors Tobias Adrian Huberto Ennis Sharon Kozicki International Monetary Fund Federal Reserve Bank of Bank of Canada Richmond Boragan Aruoba Keith Kuester University of Maryland Linda S. Goldberg University of Bonn Federal Reserve Bank of Pierpaolo Benigno Steven Ongena New York LUISS Guido Carli University of Zurich Oscar` Jord`a Elena Carletti Federal Reserve Bank of Bocconi University San Francisco Associate Editors Patrick Bolton Jordi Gal´ı Eli M. Remolona Columbia University Centre de Recerca en Economia Bank for International Michael D. Bordo Internacional (CREI) Settlements Rutgers University Marvin Goodfriend H´el`ene Rey Mark Carey Carnegie Mellon University London Business School Federal Reserve Board Michael B. Gordy Jean-Charles Rochet Pierre Collin-Dufresne Federal Reserve Board University of Zurich Columbia University Luigi Guiso Andrew K. Rose Guy Debelle European University Institute University of California, Reserve Bank of Australia Andrew G. Haldane Berkeley Douglas W. Diamond Bank of England Klaus Schmidt-Hebbel University of Chicago Takatoshi Ito Organisation for Economic Graduate School of Business Columbia University Co-operation and Development (OECD) Francis Diebold David Lando University of Pennsylvania Copenhagen Business School Lars E.O. Svensson Stockholm School of Economics Michael Dotsey Philip Lane Federal Reserve Bank of Trinity College Dublin J¨urgen von Hagen University of Bonn Philadelphia Francesco Lippi Darrell Duffie LUISS University Ernst-Ludwig von Thadden University of Mannheim Stanford University Carmen M. Reinhart Harvard Kennedy School Tsutomu Watanabe University of Tokyo Advisory Board Franklin Allen Hyun Song Shin Kazuo Ueda The Wharton School of the Bank for International University of Tokyo University of Pennsylvania Settlements Carl E. Walsh Charles Goodhart John Taylor University of California London School of Economics Stanford University Michael Woodford Columbia University