Ninth, QE and other unconventional monetary policies can have serious unintended consequences.

Unconventional measures are part of a broader transformation of monetary policymaking.

I don t think monetary policy, even unorthodox monetary policy, can do the job.

Second, they could continue to rely on conventional monetary and fiscal policy to pull the economy out of the doldrums.

NEW YORK Most observers regard unconventional monetary policies such as quantitative easing (QE) as necessary to jump start growth in today s anemic economies.

With traditional monetary policy becoming less effective, non traditional policy tools aimed at generating greater liquidity and credit (via quantitative easing and direct central bank purchases of private illiquid assets) will become necessary.

All along, such unconventional policies were viewed as a temporary fix.

In large part, that is because unconventional monetary policies were never the miracle drug that they were supposed to be.

But the eurozone s architecture in which monetary policy is centralized, but budgetary and economic policies are left up to individual governments is not viable in the long term.

As the ongoing recession exhausts the traditional instruments of monetary policy, central banks are opting for new rounds of quantitative easing (QE).

All of this adds up to a recipe for continued slow growth, secular stagnation, disinflation, and even deflation. That is why, in the absence of appropriate fiscal policies to address insufficient aggregate demand, unconventional monetary policies will remain a central feature of the macroeconomic landscape.

Consider monetary and fiscal policies.

And, while traditional fiscal policy (government spending and tax cuts) will be pursued aggressively, non traditional fiscal policy (expenditures to bail out financial institutions, lenders, and borrowers) will also become increasingly important.

To the extent that unconventional monetary policy including various forms of quantitative easing, as well as pronouncements about prolonging low interest rates serves these roles, it might be justified.

Rather than use the opportunity provided by central banks unconventional monetary policies to respond effectively, too many of them have slipped into an essentially dormant mode of inaction and denial.

The inability of unconventional monetary policies to prevent outright deflation partly reflects the fact that such policies seek to weaken the currency, thereby improving net exports and increasing inflation. This, however, is a zero sum game that merely exports deflation and recession to other economies.

Moreover, after the financial crisis erupted, central banks were increasingly compelled to depart from inflation targeting, and to implement myriad unconventional monetary policies in order to ameliorate the consequences of the crash and facilitate economic recovery.

To be sure, QE and other unconventional monetary policies do have important short term benefits. But if such policies remain in place for too long, their side effects could be severe and the longer term costs very high.

Other unconventional policies, however, have been undertaken to stimulate the economy, rather than to deal with broken markets.

As the Fed exhausts the power of traditional monetary instruments, it is heading into uncharted territory, with the potential of unpredictable outcomes and unprecedented collateral damage.

By creating the impression that something beneficial is being done, unconventional monetary policy relieves pressure on politicians.

Now, just as the US Federal Reserve contemplates an exit from its unconventional monetary policies, emerging economies current account positions are weakening, making their reliance on capital inflows increasingly apparent and increasingly dangerous.

Anxiety over unconventional monetary policies and currency wars must not continue to dominate global policy discussions, especially given last month s pledge by G 20 leaders not to engage in competitive currency devaluations.

Monetary and fiscal policies cannot be expected to turn this situation around.

The more its unconventional initiatives to repair the euro are contested, the more orthodox the ECB will be in its conduct of monetary policy.

Second, they could continue to rely on conventional monetary and fiscal policy to pull the economy out of the doldrums. This is the approach still preferred by the Obama administration, despite its poor performance.

The loose monetary policies of the early 1990s pushed inflation to hyperinflationary levels.

Our stable macro economic situation is the outcome of a mix of prudent monetary and fiscal policies.

This is not to say that sudden normalization of monetary policy is a good idea. But, if large scale investment and reform programs were initiated as complements to unconventional monetary policy measures, the economy could move onto a more resilient growth path.

Finally, there is a risk of losing sight of any road back to conventional monetary policies.

When the financial markets were working again but the economy was still growing much too slowly, he turned to unconventional monetary policies to reduce long term interest rates and accelerate the housing market s recovery.

But monetary policy typically focuses on domestic recovery. And, though unconventional measures have reduced financial instability, their effectiveness in countering widespread deflationary pressures or restoring growth remains dubious.

In many advanced economies, both monetary and fiscal policies have reached the limits of their effectiveness.

Moreover, only a small portion of the liquidity created by unconventional monetary policy has been channeled toward households and the small and medium size enterprises that generate most new jobs.

As with much concerning recent unconventional monetary policies, there is a lot about which we can only guess, including why it has happened.

Using monetary policy to compensate for deficiencies in other policy areas constitutes an institutional breakdown monetary policymakers are not necessarily getting it wrong, but they are constrained by the configuration of other policies.

As policy interest rates are already floored at zero, it is compelled to venture ever deeper into the uncharted realm of unconventional policies.

Ironically, because the traction of unconventional policies has always been limited, the fallout on real economies is likely to be muted.

In short, policies are becoming more unconventional, not less, with little clarity about short term effects, unintended consequences, and long term impacts.

In fact, politicization is a matter of scale, not a substantive transformation of monetary policymaking.

As a result, unconventional and untested policies, such as so called quantitative easing, have become the rage among central bankers.

And emerging market growth returned to pre crisis levels and appears to be sustainable, helped by unorthodox policies designed to sterilize massive capital inflows.

Indigenous communities are also involved in developing indigenous traditional knowledge policies.

The detailed report of this workshop aims to provide policymakers with a toolkit of options to draw upon when designing holistic national TK policies.

So, after a varying mix of tolerance and heterodox responses, officials are pulled into loosening their own monetary policy in order to weaken their countries currencies or, at a minimum, limit the pace of appreciation.