Monetary Policy Divergence And Central Banking In The New Era

Abstract

After the Great Recession of 2008–2009, advanced economies of the West predominantly went by the Keynesian expansionary policies. Nowadays, though, the monetary policies are diverging. Central banks are diverging on their policies as the global economies continue their significant downward convergence trend. More than 40 central banks have eased their monetary policy in 2015. The ECB, the PBOC and the BOJ are expected to ease further looking forward. Central Banks of many other emerging markets and those of advanced economies such as the USA and the UK are expected to tighten. Uncertainties about the future decrease risk appetite. Capital outflows from emerging markets and fall in trade volumes follow. © Springer International Publishing AG 2017.