But overall, although current circumstances are indeed very difficult, the framework, and our interest rate decisions to date, position us well to take on the difficult challenges that we face in the years ahead. Back to basics: the role of price stability in macroeconomic policy It is now universally accepted that price stability is a cornerstone of modern, well-functioning economies.
Inflation is costly in a social justice sense, because it arbitrarily redistributes wealth among different groups in society. Not only does inflation blunt the link between effort and reward, it typically hits hardest those who can least afford it.