Monetary Policy and Economic Performance Since the Financial Crisis

Abstract

We review the macroeconomic performance during the Global Financial Crisis and subsequent economic expansion, as well as the challenges in the pursuit of the Federal Reserve's dual mandate. We characterize the use of forward guidance and balance sheet policies after the federal funds rate reached the effective lower bound. We also review the evidence on the efficacy of these tools and consider whether policymakers might have used them more forcefully. Finally, we examine the post-­crisis experience of other major central banks with these policy tools.

Keywords: global financial crisis, macroeconomic performance, dual mandate, forward guidance, balance sheet policies, federal funds rates

JEL Classification: E31, E32, E52, E58