Ninth, QE and other unconventional monetary policies can have serious unintended consequences.

In large part, that is because unconventional monetary policies were never the miracle drug that they were supposed to be.

The Fed is hardly alone in embracing unconventional monetary easing.

Unconventional measures are part of a broader transformation of monetary policymaking.

As with much concerning recent unconventional monetary policies, there is a lot about which we can only guess, including why it has happened.

NEW YORK Most observers regard unconventional monetary policies such as quantitative easing (QE) as necessary to jump start growth in today s anemic economies.

All along, such unconventional policies were viewed as a temporary fix.

Bernanke s formal statements about the Fed s two unconventional policies have been clear.

Rather than use the opportunity provided by central banks unconventional monetary policies to respond effectively, too many of them have slipped into an essentially dormant mode of inaction and denial.

Consider monetary and fiscal policies.

To be sure, QE and other unconventional monetary policies do have important short term benefits. But if such policies remain in place for too long, their side effects could be severe and the longer term costs very high.

By creating the impression that something beneficial is being done, unconventional monetary policy relieves pressure on politicians.

Monetary and financial policies and strategies

With the outbreak of the global crisis, major advanced economies employed unconventional monetary policies, leading to massive capital flows to emerging market economies, which lowered borrowing costs and increased access to credit.

Anxiety over unconventional monetary policies and currency wars must not continue to dominate global policy discussions, especially given last month s pledge by G 20 leaders not to engage in competitive currency devaluations.

Now, just as the US Federal Reserve contemplates an exit from its unconventional monetary policies, emerging economies current account positions are weakening, making their reliance on capital inflows increasingly apparent and increasingly dangerous.

13. Monetary and financial policies and strategies

When the financial markets were working again but the economy was still growing much too slowly, he turned to unconventional monetary policies to reduce long term interest rates and accelerate the housing market s recovery.

Monetary policies are being fine tuned and aligned.

The inability of unconventional monetary policies to prevent outright deflation partly reflects the fact that such policies seek to weaken the currency, thereby improving net exports and increasing inflation. This, however, is a zero sum game that merely exports deflation and recession to other economies.

All of this adds up to a recipe for continued slow growth, secular stagnation, disinflation, and even deflation. That is why, in the absence of appropriate fiscal policies to address insufficient aggregate demand, unconventional monetary policies will remain a central feature of the macroeconomic landscape.

Moreover, after the financial crisis erupted, central banks were increasingly compelled to depart from inflation targeting, and to implement myriad unconventional monetary policies in order to ameliorate the consequences of the crash and facilitate economic recovery.

That is both logical and rational and thus not something that the US Federal Reserve can offset with unconventional monetary easing.

Other unconventional policies, however, have been undertaken to stimulate the economy, rather than to deal with broken markets.

Through its unconventional monetary easing, the Fed is attempting to create a shortcut around the imperative of household sector balance sheet repair.

An Unconventional Truth

A little unconventional.

PARIS The widespread introduction of unconventional monetary policy measures by major central banks has been a defining characteristic of the global financial crisis.

Most booms are produced by bad monetary and fiscal policies.

As a result, unconventional and untested policies, such as so called quantitative easing, have become the rage among central bankers.

This is little unconventional.

The more its unconventional initiatives to repair the euro are contested, the more orthodox the ECB will be in its conduct of monetary policy.

CAMBRIDGE The United States current fiscal and monetary policies are unsustainable.

Ironically, because the traction of unconventional policies has always been limited, the fallout on real economies is likely to be muted.

A common currency requires unified and centrally agreed monetary and fiscal policies.

Diametrically opposed spending, tax, monetary, and regulatory policies and proposals are proliferating.

Monetary and fiscal policies cannot be expected to turn this situation around.

(g) International Monetary Fund The relevance of national policies to promote growth

In short, policies are becoming more unconventional, not less, with little clarity about short term effects, unintended consequences, and long term impacts.

NEW YORK As below trend GDP growth and high unemployment continue to afflict most advanced economies, their central banks have resorted to increasingly unconventional monetary policy.

Soon after the crisis erupted, the G 20 countries embraced massive stimulus packages, unconventional monetary policies in the advanced economies, and major institutional efforts, such as the Dodd Frank financial reform legislation in the United States and the Basel III initiative to strengthen banking standards.

As policy interest rates are already floored at zero, it is compelled to venture ever deeper into the uncharted realm of unconventional policies.

China s monetary and foreign exchange policies are now in a state of limbo.

The loose monetary policies of the early 1990s pushed inflation to hyperinflationary levels.

Until the 1980s, conditionality mainly focused on monetary, fiscal and exchange rate policies.