Mervyn King attacks central bank theories of inflation

Mervyn King giving the Per Jacobsson lecture 2019, IMF headquarters, Washington DC
Mervyn King

Central banks risk being led astray by the dominant theories of inflation, Mervyn King warned on November 23, in a speech calling for a “more robust and resilient approach to monetary policy”.

King, a former governor of the Bank of England, said the models that “dominate central bank thinking” are too reliant on expectations. He called the models the “King Canute theory of inflation”.

“A thousand years ago, King Canute of England set his throne by the seashore and commanded the incoming tide

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