The government will always tell you that it wants low inflation. The real issue is the horizon over which to bring inflation down.
Every portfolio benefits from bonds; they provide a cushion when the stock market hits a rough patch. But avoiding stocks completely could mean your investment won't grow any faster than the rate of inflation.
It's a challenge for monetary policy to communicate that our inflation objective is 2 percent.
Growth is always there in the MPC's scheme of things; we don't lose sight of that, but not at the cost of inflation.
To be sure, faster growth in nominal labor compensation does not necessarily portend higher inflation.
A crucial responsibility of any central bank is to control inflation, the average rate of increase in the prices of a broad group of goods and services.
We have been mandated by the government, backed by legislation, that we have to have an inflation target of about 4%.
The issue is, you're not going to have a lot of inflation showing up when you have no velocity.
Ask me whether inflation represents longer-term problem. I think there's a potential there for excess reserves to create problems.
As 'Austrian' business cycle theory has pointed out, any bank credit inflation sets up conditions for boom-and-bust; there is no need for prices actually to rise.
Businesses that have gone through an episode of hyperinflation become understandably alert to the threat of it: at the first hint of inflation, they're likely to increase prices, since they've learned that if they don't, and inflation hits, their businesses will be wrecked.
The best way that a central bank can support growth on a durable basis is to ensure inflation is low, stable - there is financial stability - and that is the role that the central bank plays.
We will not play with inflation. We are living a delicate moment. President Obama spoke to me today about the high unemployment affecting the United States. In this crisis period, when the developed nations are not recovering, it's prudent to maintain the established inflation target.
Health-care costs when I got into the industry in '88 were 16 percent a year inflation. When I got out in 1997, they were less than 1 percent.
American economists can't understand the German fear of inflation and the effects of inflation when dealing with the world economic crisis. They wonder why Germany pursues such a different course - 'Why can't they agree with us?' I would have thought it was fairly obvious.
The role of monetary policy is to smooth out business cycles by promoting steady inflation and healthy labor markets, but modern central bankers have taken an activist turn.
If inflation is brought down, interest rates will fall. Once rates fall, we have the opportunity to maybe achieve the goal of 'housing for all' faster; take roads, infrastructure to India's interiors.
In short, both experience and economic theory imply that the US could now t to a more competitive dollar without experiencing either increased inflation or decreased economic growth.
Inflation destroys savings, impedes planning, and discourages investment. That means less productivity and a lower standard of living.
The real problem is deflation. That is the opposite of inflation but equally serious to the borrower.