Central banks risk inflation chaos without money growth target, study finds.
The article explores how central banks can control inflation without causing economic instability. It shows that when firms have trouble adjusting wages, central banks need to be careful with how they respond to inflation. If the central bank only targets inflation and interest rates, the economy can become unpredictable. However, by also focusing on money growth, central banks can stabilize inflation expectations and keep the economy on track. The key is to balance the importance of keeping prices stable with the need for a steady economy.