The global economic landscape is ever-changing. Central banks are at the forefront of navigating these shifts, striving for stability amidst the unpredictable tides. Enter FPAS Mark II, an innovative response echoing the concerns articulated by Lawrence Summers. With a focus on dynamic, scenario-based decision-making, FPAS Mark II proposes a transformative approach to economic policy.
The Case for Change
Summers' remarks to central banks highlight the imperatives of improved policymaking and communication. The traditional approach, heavily anchored in a single predicted outcome, is increasingly perceived as inadequate. FPAS Mark II's proposal is clear: transition from conventional policy optimization to comprehensive scenario analysis.
By evaluating diverse potential futures, including nonlinear paths, central banks can better prepare for the uncertain tomorrows. In effect, FPAS Mark II champions the notion of macro policy as risk management (MPRM), aiming for agility, transparency, and informed decision-making in a complex world.
A Multi-Dimensional Application
Forget the sole focus on a baseline scenario. The new age, as proposed, would see central banks managing risks from multiple economic outcomes. Interest rates, liquidity provisions, and more, would all adjust dynamically to the economic heartbeat of the moment. The result? Enhanced stability and resilience in monetary decisions.
Beyond rigid planning lies the realm of adaptive fiscal frameworks. Imagine fiscal policies that activate themselves when specific economic indicators flash red or green. This kind of agility ensures that economies can better weather uncertainties and maintain sustainable growth.
For a financial system that's truly robust, regulators must consider a spectrum of risks. The focus should be on pre-emptive action, not just reactive measures. Picture dynamic capital buffers that flex based on current economic conditions. This isn't just about surviving economic downturns, but thriving despite them.
Eager to delve deeper? Join us for an enlightening workshop from October 11th to 13th on Zoom.
Dates: October 11th - 13th, 2023
Time: Morning Session: 9am – 11am Yerevan Time; Evening Session: 6pm – 8pm Yerevan Time
Panelists: The workshop boasts a lineup of esteemed experts:
• Charles Goodhart, LSE
• Douglas Laxton, Saddle Point Research and The Better Policy Project
• Robert Ford, Former IMF, OECD, and Bank of Canada
• Hamid Faruqee, Former IMF
• Ioannis Halikias, Former IMF
• Michel Juillard, Banque de France
• Armen Nurbekyan, Deputy Governor, Central Bank of Armenia
• Narek Ghazaryan, Board Member, Central Bank of Armenia
• José Vicente Romero, Banco de la República
• Shalva Mkhatrishvili, National Bank of Georgia
• Evelyn Truong, Reserve Bank of New Zealand
• Naafey Sardar, St. Olaf College
• Vahe Avagyan, Central Bank of Armenia
• Angela Papikyan, Central Bank of Armenia
• Asya Kostanyan, Saddle Point Research and The Better Policy Project
• Haykaz Igityan, Central Bank of Armenia
Key Discussions: Topics span from the historical trajectory of Mark II to its implications for IMF surveillance. Explore the Better Policy Project’s website for a comprehensive overview.
Participation: You're cordially invited to join any session from Wednesday to Friday. Summaries and recordings will soon be available on our YouTube channel.
Looking to further enhance your skills? Michel Juillard will be spearheading an Advanced Macroeconomic Modeling course in Dynare/Julia from October 16-20. Register now to secure your spot!
Embrace the future with FPAS Mark II's innovative approach. The path to a resilient economy is paved with adaptability, foresight, and informed decision-making. Join the conversation and be part of the change.