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The problem with western central banks is their obsession with the outdated Taylor Rule. They don’t know what else to do, but by slavishly following the rule that can make serious misjudgements in the timing, speed and extent of interest rises.
https://twitter.com/richardjmurphy/status/1646143732301930496
Another problem for western, inflation-obsessed central banks, is that they tend to focus on one instrument of policy, when a mix is much better, including fiscal and regulatory policies, especially for #NetZero
The crucial aim for policy today is to protect the vulnerable from the #CostOfLivingCrisis , by strong fiscal stimulus focused on deprived areas, promoting the #GreenNewDeal supported by monetary policies of low interest rates for green investments.
Mindlessly raising the BBR in the UK will not do the trick. Instead it may worsen the crisis by leading to global bankruptcies.
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