My new piece in moneycontrol (behind paywall), reflecting on tenure of Maro Draghi.
I argue how we have moved from Greenspan standard to perhaps a Draghi standard.
In the famous 2005 Jackson Hole conference, Alan Blinder and Ricardo Reis summarised the (Alan) Greenspan standard as 11 principles:
- Keep your options open
- Don’t let yourself get trapped in doctrinal straitackets
- Avoid policy reversals
- Forecasts and models though necessary are unreliable
- Act preemptively when you can
- Risk management works better in practice than formal optimisation procedures
- Recessions should be avoided or kept short
- Most oil shocks should not cause recessions
- DOnt try to burst bubbles, mop up after
- The short term real interest rate, relative to its neutral value is viable and sensible indicator of stand of monetary policy
- Set your aspirations high
Draghi standard can be summed in three principles: knowledge, courage and humility. In an earlier speech, Draghi explained these three qualities for good policy/decision and in a way apply to Draghi as well. Having said that, Draghi’s tenure had fair bit of criticism and one should hold off hagiographies. The true test of his leadership will be seen after his tenure.
Mostly Economics 
