Editors' pick: Originally published April 21.

The economy isn't ready for the two rate hikes the Federal Reserve is planning to make this year, according to President Obama's former economic adviser Austan Goolsbee.

"I don't think that it was the right thing to start raising rates when they did," Goolsbee said, referring to the Fed's historic rate hike back in December, which marked the end of interest rates at crisis-era levels. "If you look at the growth rate of the economy, it's modest -- there are a lot of international risks and there is no sign of inflation."

Goolsbee, now a professor at the University of Chicago's Booth School of Business, said we are back on the old Fed pattern of the last six years, which centers around forecasting additional rate hikes, but failing to pull the trigger and kicking the can down the road.

Central banks around the world are grappling with economies that are stubborn to react to monetary policy. In Japan, the yen continues to strengthen against the dollar despite the Bank of Japan pushing interest rates into negative territory earlier this year. A similar situation is occurring in Europe, as the European Central Bank also resorted to negative interest rates and quantitative easing only to see inflation remain low.

"[Central banks] are certainly becoming less effective," Goolsbee said. "We have always thought that monetary policy is at best measly in its effectiveness and possibly not effective at all when you get to zero [interest rates]."

Goolsbee questioned the efficacy of negative interest rates, which are supposed to incentivize banks to lend money, which in turn should spur economic growth.

"The central banks every year just rediscover how much it stinks to be living in an environment where there is very low demand, not a lot of growth and many financial risk factors, and you don't have many tools on monetary policy to address it," he said.

The European Central Bank holds its April policy meeting on Thursday, while the Federal Reserve wraps up its two-day meeting next Wednesday. Economists don't expect the Fed to announce a rate hike next week.