Central Banks Must Master Their Fear of Inflation

Sometimes you can learn the lessons of history too well. Today’s top central bankers formed their ideas about monetary policy from the inflation of the 1970s and the recessions that followed. The slump that began in 2008 is different, and calls those ideas into doubt.

As a result, a consensus that was almost unquestioned five years ago -- that central banks should be shielded from politics and given a simple mandate to keep inflation low -- may be breaking down. What might replace it isn’t clear.