Interview: Charles Plosser

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CentralBanking.com (CB): What's your view on whether financial imbalances can be detected?

Charles Plosser (CP): It's very, very difficult. We need to understand that a lot better than we do. Economists normally think that prices adjust to equate supply and demand. Sometimes governments don't like the consequences of price adjustments and prevent the equilibrium process from working. The classic case is countries that try to maintain a fixed exchange rate and at the same time try to run an i