How Do Central Banks Control Inflation?
When prices fall, a debt gets heavier in real terms and people may delay buying; that is the worry.
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1.What is deflation?
When prices fall, a debt gets heavier in real terms and people may delay buying; that is the worry.
2.What inflation target do the Bank of England and the Fed name?
The Bank says 2 percent is low enough to keep price rises small and high enough to avoid deflation; the Fed names 2 percent over the longer run.
3.What are the four stops of the lever?
The video follows the lever in these four stops.
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