The Editorial.com interview — Kristin Forbes

MIT Sloan Professor Kristin Forbes

MIT Sloan Professor Kristin Forbes

From TheEditorial.com

Interview by Heidi Legg

When we set out to find a visionary and thinker in the financial sector to add to our collection of interviews, Kristin Forbes’ name was suggested to us by other economists, as well as from other women her age in finance, the arts and by those equally formally educated, who have opted to stay at home and raise kids. It was one of the first times that such a varied range of people suggested someone to us.

We began to research her. We were intrigued that the Bank of England had selected this American economist to join their Monetary Policy Committee as one of two external members. And we were curious about hearing from someone who was in the White House during President Bush’s years, a controversial President, and who watched the collapse of the financial markets that has brought forth finger pointing and reform. But what interested us most was that this MIT Professor was one of the earliest thinkers to focus on financial contagions. I sat down with Kristin to discuss contagions, the current thinking on energy, inflation and economic growth.

What’s your most important work goal right now?

Understanding the structure, potential, and limitations of the UK economy in order to set monetary policy appropriately. The last decade has been unprecedented—from an unsustainable boom to a major global crisis, to a very prolonged recovery, to continual challenges in the Euro Zone.  At the Bank of England, our mandate is to set monetary policy so that inflation settles around two percent. But to do that, we need to understand how many people can be working and how quickly the economy can be growing without prices going up too rapidly.

And even more difficult, since monetary policy takes about one to two years to be fully effective, we not only need to understand the economy today, but predict where it will be in the future. It is extremely challenging to know what “normal” is after the tumultuous last decade.

Read the full post at TheEditorial.com

Kristin Forbes is the Jerome and Dorothy Lemelson Professor of Management and Global Economics at MIT’s Sloan School of Management.

One thought on “The Editorial.com interview — Kristin Forbes

Leave a Reply

Your email address will not be published. Required fields are marked *