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Since the financial crisis, there has been an active debate about whether and how monetary policy frameworks should incorporate risks to financial stability. The debate has moved beyond the pre-crisis focus on the ability of policymakers to identify asset bubbles and whether monetary policy can stop asset prices from continuing to rise. Research has advanced on adding financial intermediary frictions into monetary policy models. Woodford (2010, 2012) proposes incorporating a credit spread as a third variable in an optimal monetary policy rule with flexible inflation targeting. Christiano et al. (2010) show that stock market booms tend to be accompanied by low inflation, suggesting that policy rules that focus narrowly on inflation targets will destabilise asset markets and the broader economy. Interest rate rules should thus allow an independent role for credit growth to reduce the volatility of output and asset prices.
CIRSD Vice President Stefan Jovanović Speaks at Regional Conference on China’s Role in the Western Balkans
Belgrade, June 5, 2025 – Stefan Jovanović, Vice President of the Center for International Relations and Sustainable Development (CIRSD), participated in the regional conference “Democracy Meets Strategy: Parliament’s Place in China Policy”, held in Belgrade. The event gathered parliamentarians, policymakers, and experts from across the Western Balkans to examine the region’s evolving cooperation with the People’s Republic of China. Read more
