In which OECD and emerging countries has the central bank not reacted to inflation in the recent period?
When a central bank does not react to inflation, even when it becomes high, it is because the government wants to conduct a policy of massive demand stimulus and may even be suspected of populism, given a desire to stimulate consumption whatever the risks of overheating and imbalances. It is also because the central bank is not really independent. When we look at large OECD and emerging countries in the recent period , we find that central banks have : R eact ed “normally” to inflation in most emerging countries (11 of the 15 countries we look at); C learly not react ed to inflation in all OECD countries.