The US Fed’s Role in the Economy

Barry Eichengreen argues:  Central banks should focus on developing more effective macro-prudential instruments. They should widen the regulatory perimeter – that is, they should work to bring nonbank financial institutions under their regulatory umbrella. They should use the resulting instruments and powers preemptively. And they should adjust monetary policy to address potential financial risks as a last resort, not as their first line of defense.

The Role of the Fed

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