Bernanke and Blanchard Say Central Banks Need Cooler Job Markets
- Former Fed chair, former IMF chief economist publish new study
- Wages have become more important inflation driver, they argue
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Central bankers in the last mile of their battle against inflation still need labor markets to cool, though the impact on unemployment may vary across countries.
That’s according to a new analysis by former Federal Reserve Chair Ben Bernanke and former International Monetary Fund Chief Economist Olivier Blanchard, who undertook the research for the Peterson Institute for International Economics in a joint project with ten central banks. The work is a follow-up to their previous analysis that looked at the causes of pandemic-era inflation in the US.