I believe that a favorable environment has been put in place in which wage increases stimulate consumers' appetite for spending, leading to firms' bullish price-setting stance. III. The Bank's Conduct of Monetary Policy Next, I will talk about the Bank's conduct of monetary policy.
Around the third century AD in the Roman Empire, for instance, the silver coins collected by the tax authorities were melted and combined with inferior metals, yielding many more coins to spend on the Caesar’s priorities than the initial tax take. With too much money chasing too few goods, the end result was high inflation.