- Today’s inflation has a huge supply shock element
- But central bankers are not off the hook
Did quantitative easing (QE) contribute to today’s rampant price growth? The jury (well, the Treasury Committee), is still out. Views are currently being collected on “the impact of QE on the ongoing outbreak of inflation”.
In the pandemic, a meme emerged. On the left-hand side, a worried figure warns that creating money cannot fight an economic downturn and would distort the natural rate of interest. On the right-hand side, a Federal Reserve representative replies “haha money printer go brrrr”. Were central banks really too cavalier about ‘unconventional’ monetary policy? The Bank of England (BoE) seems to think not.