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 The Evolving Role of the Federal Reserve


Paul WACHTEL Stern School of Business, New York University. Contact : pwachtel@stern.nyu.edu.L'auteur remercie ses coauteurs, Peter L. Rousseau et Moritz Schularick, pour leurs discussions sur la finance, la croissance et la crise depuis de longues années.

The financial crisis has made central banks use functions that had been largely ignored for decades. At the beginning of the 20th century, central banking was about price stability and open-market activity. Since 2008, the functions of financial stability and of liquidity provider to illiquid financial institutions have been rediscovered. From now on, central banks will have to operate broader roles: regards on macroeconomic policy, implementation of macro-prudential policy and regulation of financial institutions. With these broader responsibilities, the environment in which central banks operate will also change becoming more political.