- The rise of technology is going to force fundamental changes to the approach of central banks in the coming years, argues Barclays' Christian Keller.
- Central banks will almost inevitably move away from their focus on keeping inflation at or around 2%.
- Instead, they're likely to look at ensuring financial stability and the distributional effects of monetary policy.
LONDON — Advances in technology and huge shifts in the way society functions mean that the way central banks operate will fundamentally change in the coming years, according to one of Barclays' most senior economists.
Speaking on Tuesday at the launch of Barclays' annual Equity Gilt Study, Christian Keller, the bank's head of economics research said that major central banks will almost inevitably be forced to move away from their focus on keeping inflation at or around 2%.
"Amazon’s unique distribution model and widening range of products could impart a new disinflationary impulse on goods prices," Hafeez said back in October 2017.
Keller's thesis is similar, although he did not mention any specific companies.
Ultimately, Keller doesn't think, in the words of Milton Friedman that "," and believes that attempting to keep it at a specific level will become a less and less important form of monetary policy in the coming years.
"The fine tuning of inflation through the inflation targeting regime we've been used to in the last 20 years, I don't think that is necessarily the system of the future," he concluded.