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Article: How low can you go?(central banks debate target interest rates)(Brief Article)
- Article from:
- The Economist (US)
- Article date:
- November 11, 2000
CopyrightCOPYRIGHT 2000 Economist Newspaper Ltd. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Central banks disagree on the rate of inflation to aim for
ALL central bankers agree that price stability should be the primary goal of monetary policy. But what exactly does "price stability" mean? This question was debated last week at a conference organised by the European Central Bank (ECB). The issue is more controversial than most central bankers would have you believe. Some economists argue that very low inflation rates can curb economic growth.
The ECB defines price stability as a year-on-year increase in consumer prices of less than 2% over the medium term. The central banks of Australia, Britain, Canada, New Zealand and Sweden all have ...