Wren-Lewis, S., (2013), “Central Banks and Financial Stability”, Social Europe Journal, 18 Νοεμβρίου.
Inflation is significantly below 2% almost everywhere. In the US, Japan and the UK (even though in the UK inflation is still just above 2%) central banks are doing a great deal to get inflation back to 2%. Maybe not enough, but their goal is clear. The ECB is belatedly following the same path (although it remains somewhat behind), but this has caused a very public split in its ranks. One reason given by those who have opposed the ECB’s latest rate cut is a risk to financial stability, and house price increases in certain Eurozone cities. In the US some have raised concerns that continuing QE might generate financial instability. In the UK one of the three ‘knockouts’ to forward guidance, that could allow interest rates to rise even if unemployment remained above 7%, concerns financial stability.
And in one country, Sweden, the independent central bank has kept interest rates above the ZLB, even though prices have been literally falling. While the central bank cut short rates to 0.25 in 2009, during 2010 they were increased to 1%, and during 2011 to 2%. They have since been cut to 1%, but the central bank does not want to cut any further despite prices being flat or falling throughout 2013. Yet the central bank has a clear target for inflation of 2%.
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Σχετικές Αναρτήσεις
- Wren-Lewis, S., (2013), “The ‘Official’ Cost Of Austerity”, Social Europe Journal, 29 Οκτωβρίου.
- Wood, R., (2013), “Europe: The Failure of Internal Devaluation”, EconoMonitor, 13 Νοεμβρίου.
- Wolf, M., (2013), “Why Draghi was right to cut rates”, The Financial Times, 12 Νοεμβρίου.
- Münchau, W., (2013), “Optimism about an end to the euro crisis is wrong”, The Financial Times, 27 Οκτωβρίου.
- Münchau, W., (2013), “The eurozone needs to get inflation up again”, The Financial Times, 10 Νοεμβρίου.
- Cohen-Setton, J., (2013), “Blogs review: The deflationary bias of Germany’s current account”,Bruegel, 06 Νοεμβρίου.