Necessity as the mother of invention monetary policy after the crisis

governors feel that they did not receive a lot of criticism for acting politically or crossing
the line into the political realm during the crisis, most academic respondents think that
central banks were criticized for crossing the line into politics.
2. CENTRAL BANK GOALS
The global financial crisis challenged important elements of the pre-existing consensus
that monetary policy should be aimed at price stability and should use just one instrument:
a short-term policy interest rate. But no new consensus has yet been reached. In our view,
several elements of the pre-crisis consensus, such as central bank independence and the
focus on long-term price stability, remain valid today. Other elements, however, may have
to be rethought.
Figure 1. Discussions about the central bank mandate outside of the central bank
Notes: The left-hand chart shows whether, according to central bank governors, a discussion took
place outside the central bank about changing the mandate. The right-hand side chart shows the
changes that were discussed (in % of the respondents who answered “Yes”). The explanations
provided in the survey indicate that when governors answer “other”, they mostly refer to
discussions on adding financial stability. Source: Authors’ calculations based on a survey
conducted in 2016.
To assess central bankers’ view on whether their mandates had changed, we asked two
questions in our survey. The first pertained to external opinions and influences: “Did the
world financial crisis of 2007-2009 and/or its aftermath create discussions in your country
but outside your central bank about whether it would be desirable to modify the bank’s
mandate in any way? If “Yes,” were those discussions about: (please check as many as
apply)”. As the left-hand chart in Figure 1 shows, the answers to the “yes or no” question
literally comprised a bottle half full and half empty. Exactly half the governors answered
“yes,” which surprised us a bit on the low side.
We asked the same two questions about discussions within central banks: “Did the world
financial crisis of 2007-2009 and/or its aftermath create discussions inside your central
bank about whether it would be desirable to modify the bank’s mandate in any way?
(please check one)” and “If “Yes,” were those discussions about: (please check as many
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