Central banks should Recognize and Communicate the Limits of Monetary Policy

Introduction

When President George W Bush hosted a meeting of finance ministers from the Group of 20 countries in 2008, he apologized for the financial and economic fallout of the Great Financial Crisis (GFC), and the United States accepted responsibility. Today, the global economy faces another crisis, with annual consumer price inflation in many advanced economies at a 40-year high.

Inflation reached a multi-decade high in 2022, the rich world’s highest reading since the…