Central Banks
Central Banks Didn’t Mess Up That Badly, But They Might Do Now
- Wages have been subdued, expectations anchored, Reichlin says
- Former ECB economist questions ‘better to do too much’ view
Lucrezia Reichlin
Photographer: Leonardo Cendamo/Getty Images
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Could better monetary policy have kept a lid on the global inflation shock? Probably not, on the whole — but central banks now need to tread very carefully if they’re to avoid crashing their economies.
Those are the views of Lucrezia Reichlin, a professor of economics at London Business School and a former director general of research at the European Central Bank. A key takeaway from the whole episode, she argues, is that governments and central banks need to work more closely together so their policies complement each other.