What objectives should central banks have nowadays?
At the end of the 1970s and in the early 1980s, after the shocks to oil price s and the lax monetary policy reaction to these shocks, it was legitimate for central banks to have an objective of keeping inflation low. But the monetary policy objective should not be immutable. We believe it should have two characteristics: It should correspond to today’s problems and the imbalances that must be correct ed now ; It should be controllable by monetary policy, and central banks must have the ability to achieve this objective. Based on these two conditions in the present situation, it could make sense to abandon the inflation objective, and perhaps to choose a debt ratio objective.