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Inflation is a monetary phenomenon. Since the Central Bank controls the money supply, then by definition the Central Bank controls inflation.
by SSJPython 4y ago
Inflation is a monetary phenomenon. Since the Central Bank controls the money supply, then by definition the Central Bank controls inflation.
- WalterBright 4y agoI meant they control the interest rates, which do not control inflation. Inflation comes about from the creation of money, which the central bank does to fund the government deficits.
- imtringued 4y agoThe central bank can limit money creation but can't force consumers, businesses or the treasury to borrow or spend money.