Paul Krugman: Monetary Policy Is 'Pretty Ineffective'

The transcript discusses the challenges and evolution of monetary policy in low growth environments, highlighting the ineffectiveness of traditional tools like zero rates and the introduction of quantitative easing (QE) and negative rates. It explores the idea of rethinking inflation targets and nominal GDP targeting, as suggested by John Williams of the San Francisco Fed. The discussion reflects on the historical efforts to control inflation and the reluctance to change established targets. The significance of central bank meetings, such as Jackson Hole, is also highlighted, emphasizing the role of research and closed-door discussions in shaping economic policy.

What role do central banks play in managing inflation and economic stability?

What are the potential consequences of not rethinking the 2% inflation target?