Gabriel Makhlouf: COVID-19 and the future of monetary policy

Remarks by Mr Gabriel Makhlouf, Governor of the Central Bank of Ireland, at the Institute of International and European Affairs, Dublin, 14 September 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

What seems like many, many, months ago - in April in fact - I started a blog. In my first post I wrote that Covid-19 would be the main theme that I'd write about over the subsequent few weeks.  Back in April, I suspect that many of us were hoping that the pandemic would be an unprecedented but relatively short-lived phenomenon.  Things haven't quite turned out that way and, as we start to learn to live with the virus, I'd like today to talk about the pandemic's impact on the economy and the implications for monetary policy in particular.

The response to the pandemic has had a significant impact on current economic activity and increased uncertainty about the future.  Undoubtedly, the pandemic will also leave a legacy of structural change, some of which will be an acceleration of trends already in motion and some of which is, as yet, unclear or perhaps even invisible.  We are already experiencing changes which could have profound and long-lasting implications for the way we live, work, consume and communicate. These times of disruption can pose significant challenges, but they can also be an impetus for progress.  For policy makers, it is important to adapt to the new world by minimising the costs of any transition and ensuring that strategies remain effective.