the ugly dilemma facing Europe’s central banks – and why it’s a mistake to cut too soon
- Written by Daniel Gros, Professor of Practice and Director of the Institute for European Policymaking, Bocconi University
'Rock, you look a lot like a hard place.'Cagkan SayinCentral banks in Europe are discovering an old dilemma: when they lower interest rates because inflation is slowing down, it’s likely to weaken their currencies. This in turn may delay the fall in inflation towards their canonical 2% target.
The Swedish Riksbank experienced this first hand...
