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SUMMARY:UK monetary and credit policy around the Radcliffe Report - Oliver
  Bush\, Bank of England and London School of Economics
DTSTART:20170130T170000Z
DTEND:20170130T183000Z
UID:TALK67261@talks.cam.ac.uk
CONTACT:Dr Duncan Needham
DESCRIPTION:The Radcliffe Report (1959) was the most important statement o
 f the British establishment view that monetary policy was not up to the ta
 sk of macroeconomic stabilisation and should be complemented by policies w
 hich acted directly on lending. It was published during a three decade-lon
 g experiment of using credit policies alongside changes in the policy rate
 . These non-price tools are similar to policies now being considered by ma
 croprudential policymakers. We describe what these tools were and how they
  were used and use a largely hand-collected dataset and a novel identifica
 tion strategy – factor-augmented local projections (FALPs) – to invest
 igate their effects.\n\nWe find that\, contrary to the views of Radcliffe 
 Committee members\, the impact of changes in the policy rate on activity a
 nd prices was of the same direction and of similar order of magnitude as f
 ound for later periods in the UK and USA. Further\, monetary policy shocks
  appear to have had an important bearing on the path of inflation\, partic
 ularly in the 1970s. Our results hint at a negative effect of credit polic
 y on output via a supply channel\, although the robustness of these result
 s is questionable. Our results call into question policymakers’ reliance
  on credit policies to stabilise output\, inflation and the trade balance 
 and raise questions about the consequences of this reliance on macroeconom
 ic outcomes over this period. In contrast\, our results suggest that polic
 ies that act directly on lending may be more suitable than monetary policy
  for financial stability policymakers.
LOCATION:Darwin College (Seminar Room\, No. 1 Newnham Terrace - entrance v
 ia Porters Lodge on Silver St)
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