If we do want to canalize and bring inflation down maybe that means we have to have bigger sacrifice in our output and it is a hard decision – says Xing Guo, Bank of Canada.
The past decade has taught the central banking community the important lesson that negative shocks can happen more frequently, and the time between the shocks may not be long enough to let central banks regain policy space.
Inflation in Britain has remained well under control since the financial crisis. Monetary and government debt management policies have become much more closely connected, and it will be important to loosen the connection while containing post-pandemic inflation pressures.
