ABSTRACT
This chapter considers the politics of the monetary policy stasis and what role the G20 can play in overcoming this stasis and in prompting a rethink in monetary policy. It provides an account of this monetary policy stasis and it contrasts the change in assumptions that have occurred in the field of financial regulation, evident in the rise of macroprudential regulation, with the relative inertia and stasis in monetary policy. The chapter describes several criticisms of inflation-targeting regimes are recounted, and an emerging position of the Bank for International Settlements is distinguished from that of the International Monetary Fund. It discusses why it makes most sense for the G20 to do this collectively rather than for national governments to go it alone. A focus on price stability provided no guarantee against major financial and macroeconomic instability in the period leading up to 2008. Price stability was seen to be sufficient for macroeconomic stability.
