How do central banks control inflation? A guide for the perplexed

When prices go up because a currency is being debased, that is inflation. It might make a social and political difference if the price increases are in milk and bread, or housing and healthcare, rather than in financial assets, but economically it is irrelevant. It reflects only what the artificial money was first used to buy (also known as the Can

Hyperinflations are not caused by aggressive central banks. They are caused by irresponsible and profligate legislatures that spend far beyond their means and by accommodative central banks that lend a helping hand to governments.

Where do we stand on the issue of deflation versus inflation? We think we’ll have both. Deflation first, and then inflation. It will probably take further downturns and a greater collapse of borrowing and lending to induce even more extreme responses from governments. In the endgame, we see a very low likelihood that the Federal Reserve and other c

In the new thinking, monetary policy strives to match the base interest rate to the economic growth (or degrowth) rate.

central banks to ‘monetary-fund’ government deficits. They argue this allows the state to balance economic activity by acting as the ‘employer of last resort’

Central banks & other monetary policy authorities: