The Bank of England Governor Mervyn King, Commenting on a Speech

question 85

Essay

The Bank of England Governor Mervyn King, commenting on a speech given by then Fed Chairman Greenspan, said "any (coherent) monetary policy can be written as an inflation target plus a response to supply shocks." What do these comments mean and what insight do they provide us to the focus of central banks?

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Definitions:

Trench Warfare

A form of land warfare using occupied fighting lines consisting largely of military trenches, prominent during World War I.

Diagnosed

The process of identifying a disease or condition from its symptoms by a medical professional.

Civilizing Mission

A rationale for colonization, proposing that imperialism was a duty to civilize "barbaric" societies by spreading European culture and Christianity.

Soldiers

Members of an army, trained and employed to engage in combat and military operations, serving the defense and interests of their country.