Central Banks — Misusing Local Tools For Global Problems
(5 min read)
Despite the extreme and experimental monetary policy and the tight labour markets witnessed over the past decade, price and wage inflation have been far lower than expected. Central bankers have been obsessed by decimal point deviations from the inflation target, all the while underplaying distortions in financial markets, real estate markets and the zombification of corporates. The core of the problem, however, is that price and wage inflation are not generated domestically to the same extent as they once were and cannot, therefore, be quite easily so controlled by domestic monetary policy.
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