Central banks are still the only game in town

Policymakers will have to continue their lonely fight with a new set of 'unconventional unconventional' monetary policies

With most advanced economies experiencing anaemic recoveries from the 2008 financial crisis, their central banks have been forced to move from conventional monetary policy - reducing policy rates via open-market purchases of short-term government bonds - to a range of unconventional policies. Although the zero nominal bound on interest rates - previously only a theoretical possibility - had been reached and zero interest rate policy (ZIRP) had been implemented, growth remained anaemic. So central banks embraced measures that didn't even exist in their policy toolkit a decade ago. And now they are poised to do so again.

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