Central Bankers Confront Decision on Which Risk Scares Them Most

Central bankers from the U.S. to China may have to decide which is their worst nightmare: the Great Inflation of the 1970s or Great Depression of the 1930s.

As stock markets slump worldwide and the global economy sputters, monetary-policy makers are struggling to come up with new strategies to spur growth. The catch is that they risk adding to price pressures if they pump more money into the financial system as inflation climbs.