Ever come up against an unreliable shower tap? Turn slightly and it becomes too hot. Twist back and it takes ages to cool down. Well, that is the analogy Milton Friedman is said to have used to explain the difficulties of using the tools of monetary policy, which have “long and variable” lags, to target inflation.But we seem to have forgotten Friedman’s warnings — that monetary policy is a blunt tool. First, the era of low inflation from the mid-1980s until the global financial crisis enhanced the credibility of central banks but perhaps also exaggerated their power. Second, after the crash, economies became more dependent on rate-setters given the only limited fiscal stimulus. Programmes and tools such as quantitative easing, yield curve control and forward guidance were introduced. This raised central banks’ influence on markets.
遇到过不好用的淋浴水龙头吗？轻轻拧一下，水就会太热。拧回来之后又要好久水才能变凉。据说，米尔顿•弗里德曼(Milton Friedman)就是用这个类比来解释使用货币政策工具应对通货膨胀的困难之处的。货币政策工具具有“漫长而易变”的滞后性。