Home > Monetary Policy > “Prof Woodford says the Bank of England could cause inflation to rise”

“Prof Woodford says the Bank of England could cause inflation to rise”

The BBC put a few questions to Michael Woodford; I particularly enjoyed the caption they used on the picture.

New governor Mark Carney is expected to announce policy details in August.

But this could risk inflation running higher than the Bank’s 2% target, says Prof Michael Woodford of the University of Columbia.

“If it’s too successful, maybe it then pushes up inflation more than you want, and that’s obviously a concern in the UK as the Bank of England has been overshooting its inflation target as it is,” he told the BBC.

Michael Woodford, inflation hawk?

Update: I was being sarcastic, but the BBC business page carries a link to this article with the subheading:

The Bank of England’s expected new policy of forward guidance risks increasing inflation, a leading expert has warned.

I’m not sure he would put it exactly like that.  But UK macro never fails to deliver the laugh/cry moments.  “Keynesian” macro “experts” spend years telling us the Bank is impotent… and here’s Michael Woodford – Michael Woodford – telling the Bank not to screw up and create too much inflation.

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Categories: Monetary Policy
  1. W. Peden
    August 5, 2013 at 14:04

    I have noticed some Keynesian folk switching from “monetary policy is ineffective at the ZLB; it’s all about fiscal policy” to “monetary policy can be hampered by fiscal austerity”.

    The UK’s apparent recovery right now, in the thick of an austerity plan, must be an embarassment for liquidity-trap Keynesians.

    • August 5, 2013 at 14:47

      Yes, and particularly amusing that Keynesians have tripped over themselves to attack “Help 2 Buy” because it’s the wrong kind of fiscal stimulus!

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