March 2, 2021

Central Banks Fight the Wrong Inflation by Creating Inflation

The primary mission of central banks has traditionally been to contain inflation. In the words of the Bank of Canada, “At the heart of the Bank’s monetary policy is a commitment to maintaining low and relatively stable inflation — in particular, to keep the rate of inflation close to the 2 percent midpoint of the 1 to 3 percent target range.” However, in the past decade, other motivations besides inflation moved to the center of their decision-making, such as employment and economic growth. The result is central banks around the world purchasing trillions of dollars of domestic sovereign debt. Read More

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