Ravi Menon: Taming inflation is like trying to slow down a speeding car on a gentle s

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Ravi Menon: Taming inflation is like trying to slow down a speeding car on a gentle s

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19-07-2022, 01:40 PM

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Ravi Menon: Taming inflation is like trying to slow down a speeding car on a gentle s

An honorable member of the Coffee Shop Has Just Posted the Following:

Taming inflation is like trying to slow down a speeding car on a gentle slope. It takes a combination of forcefulness and calibration.

If you do not depress the brakes early enough or hard enough, you cannot break the speed momentum – likewise, monetary policy needs to act early and decisively.

But if you jam the brakes too hard, the car may skid or even topple over – the economy may go into a recession.

So you have to pump the brakes progressively, to gradually slow down the car to a...

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