Monetary Policy, In Practice

Myron Scholes Global Markets Forum

October 29, 2012, 5:30–7 P.M.

Lorenzo Bini Smaghi discussed how central banks have to take monetary policy decisions, in particular in the euro area, in a situation of high uncertainty not only about the state of underlying economic conditions but also about the reaction of market participants and other policymakers, which is not incorporated in standard macro models. This leads to second-best decisions.

This event was part of the Initiative on Global Markets (IGM) and is generously sponsored by Myron Scholes.


Lorenzo Bini Smaghi is currently visiting scholar at Harvard’s Weatherhead Center for International Affairs. He is chairman of the boards of SnamReteGas and of Fondazione Palazzo Strozzi. He also chairs the Italian chapter of the Alumni Club of the University of Chicago.

From June 2005 to December 2011 he was a member of the executive board of the European Central Bank. He started his career as an economist at the research department of the Banca d’Italia (in 1983) and became head of the policy division of the European Monetary Institute (in 1994) and then director general for international affairs in the Italian Treasury (in 1998).

He has been the chairman of the board of SACE Spa, and a member of the boards of Finmeccanica, MTS, and the European Investment Bank.

He holds a bachelor’s degree in economics from the Université Catholique de Louvain (Belgium), a master’s degree from the University of Southern California, and a PhD from the University of Chicago.

He is the author of several articles and books on international and European monetary and financial issues. He is currently a member of the A-List of Commentators for the Financial Times.