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.
遇到過不好用的淋浴水龍頭嗎？輕輕擰一下，水就會太熱。擰回來之后又要好久水才能變涼。據說，米爾頓?弗里德曼(Milton Friedman)就是用這個類比來解釋使用貨幣政策工具應對通貨膨脹的困難之處的。貨幣政策工具具有“漫長而易變”的滯后性。