@article{esj 167, author = {Richard Wade}, title = {A Post-Great Recession Mandate for the Bank of England}, volume = {3}, year = {2010}, url = {http://publications.essex.ac.uk/esj/article/id/167/}, issue = {2}, doi = {10.5526/esj110}, abstract = {<p class="MsoNormal" style="margin: 6pt -2.3pt 6pt 0cm; line-height: 22px; font-size: 11pt; font-family: Calibri, sans-serif; caret-color: rgb(0, 0, 0); color: rgb(0, 0, 0); text-align: justify;"><span style="font-family: Sylfaen, serif; color: black;">This paper argues that, in light of the 2007-10 economic difficulties, a regime of inflation targeting alone no longer constitutes a sufficiently robust macroeconomic policy framework to make successful economic outcomes in Britain likely.  Inflated asset prices that were not indicated by standard inflation indices were a feature of the lead up to the crisis, and also one of its major causes. Excessive growth in the financial system and a consequent increase in the quantity of money, broadly defined, is usually the first indication of an upcoming boom in asset prices.  This was also the case in previous asset price booms in 1972-73 and 1986-89.  In light of this and the returning of banking supervision powers to the Bank of England, this article advocates a corollary to the existing inflation target mandate from Parliament calling on the Bank to ‘ensure sustainable growth in the banking system’.  It is hoped that this would lead to the monetary authorities putting more emphasis on money broadly defined without slavishly relying on a monetary aggregate for interest rate and funding policy decisions.  The article also tackles some potential criticisms of this proposal and anticipates the constitutional questions it is likely to throw up.<o:p></o:p></span></p>}, month = {5}, keywords = {Economic recession,Britain,inflation,Bank of England.}, issn = {2633-7045}, publisher={University of Essex Library Services}, journal = {Essex Student Journal} }