A key finding in this literature relates to monetary policy’s “commitment,” or, in common parlance, inflation targets. In a model with government debt, the higher the level of that debt, the more incentive there is for government to create some surprise inflation, because surprise inflation erodes the real value of outstanding debt and reduces the need for future taxation.
As a result, this could limit the ability of households and small businesses to access credit and other types of financial products and services. The beauty of community banks is in their differences—whether in their personality or business model. Each is unique in its mission, service delivery, and profile.