While some of such constraints are attributable to external factors, most are induced from within the domestic economy. Our experience in Nigeria is not an exception. Trade off in price stability mandate One of the major problems is policy conflict in the pursuit of the overall economic objectives of government, particularly the trade-off in the pursuit of stabilization and growth objectives.
Sometimes central banks are confronted with problems of inflation and stagnation, otherwise known as stagflation. If the central bank sticks rigidly to the mandate of price stability, it might address the problem of inflation in such a way that the fall in aggregate output might be exacerbated.