Is it time to give central banks new objectives?

The Fed’s conference this week on monetary policy strategy has put central banks’ frameworks back in the spotlight. But even the more radical options being discussed, such as price level targets, are essentially just tweaks to the existing framework. In this Focus, we consider whether a much bolder shake-up of central banks’ objectives could be on the cards in response to growing concerns about major issues such as climate change, low productivity, inequality and high housing costs. While we think that it would be wise for central banks to end their fixation with precise inflation targets, governments are in most cases much better-placed to achieve wider goals.