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The Central bankers debated for a second  day at the Kansas City Federal Reserve Yearly policy retreat in Johnson Hole, Wyoming. Against the increasingly tense Worldwide economic backdrop, their debate about the Challenges are facing monetary policy takes , with investors nervous about the risks of recession stem from President Donald Trump’s escalating trade war with China. The news and commentary from the second and Final day of the conference presentations. In the Closing session of the conference, Reserve bank of Australia Governor Philip Lowe told the spectators that central bankers have inadequate ability to cushion the worldwide uncertainty.   

We are witnessing a period of major political shocks lowe stated, cite development in the U.S. Brexit, HongKong, Italy and elsewhere. The political shock are spinning into economic shocks. The Infrastructure investment and Structural modification in economies around the world would have much superior effect than cutting interest rates. But politicians are unenthusiastic to take action. Ending the political  hesitation would also bring benefits. Ending the political vacillation would also Bring Benefits. With these three levers stuck, the challenge we face is monetary policy is carrying too much of a burden he stated.

About the contradiction at the heart of a worldwide monetary system organized around the worldwide standard in the 1960s, the Yale economist Robert Triffin famously warned . A fixed supply of gold in a growing worldwide economy would eventually cause a crisis. Known as Dilemma and sure enough by 1971, U.S President Richard Nixon was forced to close the gold window, ending the Shiny yellow metal’s supremacy in the worldwide system. The Second paper obtained at Jackson Hole Recommended the dilemma has returned, but in a different form this time, U.S dollar denominated debt is the new gold.

The Supply of safe dollar possessions is no longer backed by gold, the furnish is fueled by increases in Public and Private leverage. Krishnamurthy and Lustig  wrote. In Consistent with financial stability the dollar influence will be absconding in a manner . The events of the last 15 years recommended that the Policy makers should pay close attention to this question.