How does raising interest rates control inflation?

When central banks raise interest rates, the impact is felt far and wide. Mortgages become more expensive, house prices might fall and unemployment can rise. So why do central banks do it? This film from The Economist tells you why.

The likely impact of central bank digital currencies on quantitative easing

Many central banks are considering launching digital currencies. Far from a simple technological innovation, central bank digital currencies (CBDC) might persistently alter the size and composition of central bank balance sheets. Martina Fraschini, Luciano Somoza and Tammaro Terracciano analyse the equilibrium effects of the introduction of a CBDC and its interaction with current monetary policies. They show how and when issuing a CBDC might render expansionary policies quasi-permanent.

Read their insightful article HERE.

Bank of England and the Changing Face of Central Banking

From Forbes –

“The Labour Party has announced that it would review the mandate of the Bank of England with an eye to adding to its objective so that the British central bank doesn’t just target inflation, but also employment and economic growth, if it gets into power in 2020. The Shadow Chancellor John O’Donnell has given the assurance that it wouldn’t affect the independence of the BOE, which has been one of the key factors that has increased the credibility of central banks since the early 1990s.

But, it is worth refreshing the objectives of central banks, especially as key relationship among monetary policy variables have changed alongside the structure of the economy.”

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