Central banks need new rules

Quantitative easing requires central banks to take huge gambles. The Federal Reserve's announcement on 3 November that it would pump another $600 billion into the US economy before end June 2011 has divided leading monetary economists. The attempt deliberately to engineer expectations of higher inflation when there was no sign of deflation would have made a former generation of central bankers spin in their graves. Nobody can say with confidence whether it will achieve its objectives or not; the

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