Central banks act in a simple manner

Central banks could use complex decision methods including a detailed analysis of the effects of monetary policy, for example: The effect of low interest rates on banks; The overall trend in financial conditions; Neo- Fisherism ; The international effects of monetary policies. Even if central banks carry out this analysis, their monetary policy is ultimately very simple, perhaps to ensure that it is easy to explain . In the end, central banks raise interest rates and stop quantitative easing when growth and inflation rise, and lower interest rates and increase the size of their balance sheet s when growth and inflation decline.