Monetary Policy and Its Unintended Consequences

After the 2008 crisis and the COVID-19 pandemic, central banks increasingly intervened in the economy, seeking to stabilize markets and support growth. But this policy created a dangerous precedent: the more central banks did, the more was expected of them, and the broader the scope of new interventions became. In his book, R. Rajan – former head of the central bank of India and one of the most authoritative economists of his generation – shows how extraordinary measures led to inflation, volatility, and market dependency on regulatory support. This is a comprehensive analysis of the decisions made in response to the major crises of the 21st century, and an argument for central banks to return to their core mandate: low inflation and financial stability.