The art of monetary policy lessons from Sun Tzu for central banks Kristin Forbes

Format:

Book

Author/Creator:

Forbes, Kristin, author.

Series:

Karl Brunner lecture series

Karl Brunner distinguished lecture series

Language:

English

Subjects (All):

Monetary policy.

Banks and banking, Central.

Physical Description:

1 online resource

Place of Publication:

Cambridge, Massachusetts The MIT Press [2026]

Summary:

"Strategic lessons for monetary policy from the last two tumultuous decades based on insights from Sun Tzu, the Chinese philosopher and author of The Art of War. When central banks were forced to innovate and develop a multifaceted set of new weapons in response to the 2008 global financial crisis and 2020 COVID-19 pandemic, the result was a substantial expansion in their authority and reach. In The Art of Monetary Policy, Kristin Forbes draws lessons for monetary policy of the last two decades from the principles of Sun Tzu, the author of The Art of War, a Chinese philosopher and military strategist from the fifth century BC. Tzu proposed several key principles for success—tenets that apply to monetary policy and the battlefield today: (1) plan in advance for the next battle; (2) accept and adapt to the inevitability of powerful, external shocks outside your control; (3) establish a strong tactical position; (4) develop a variety of weapons that can be combined for different maneuvers and situations; (5) maintain flexibility so that you can quickly modify your strategy; and (6) consider the longer-term costs when evaluating the trade-offs of different approaches. These principles provide insights into what central banks did (and did not) do well over the last two decades, as well as how they should deploy interest rates, balance sheets, emergency support programs, forward guidance, and macroprudential tools in the future. While the optimal strategy in both war and monetary policy is more of an “art” than a science, adopting these principles can improve our ability to battle the next crisis and build more resilient economies during peaceful periods"-- MIT Press Direct

Contents:

Laying plans : preparing for the next financial battle

Heaven : the inevitability of powerful external shocks

Earth and terrain : establishing a strong tactical position

Maneuvering : combining weapons and methods

Modifying and varying tactics : maintaining flexibility

The costs of fighting battles : trade-offs

Notes:

Includes bibliographical references and index

Online resource; title from PDF title page (MIT Press Direct, viewed August 26, 2026)

Other Format:

Print version Forbes, Kristin Art of monetary policy

ISBN:

0262052350

9780262052351

0262052342

9780262052344

OCLC:

1581932143

Access Restriction:

Restricted for use by site license