Former Fed Gov. Mishkin: Inflation Expectations Low

The transcript discusses the relationship between full employment, wage gains, and inflation expectations. It highlights the challenges faced by central banks, including the Federal Reserve, in managing inflation targets. The discussion includes the concept of 'inflation phobia' and the need for a flexible approach to inflation targeting. The transcript also addresses the difficulties central banks encounter in generating inflation and suggests that a more adaptable policy could be beneficial.

What is one reason why wage gains are not being observed despite full employment?

• Low inflation expectations

• Decreased consumer spending

• High inflation expectations

• Increased productivity

What is a common fear among central bankers regarding inflation?

• Deflationary spirals

• Inflation falling below 1%

• Inflation exceeding 2%

• Stagnant economic growth

Why might central banks consider allowing inflation to exceed their target temporarily?

• To increase consumer confidence

• To stimulate economic growth

• To reduce unemployment

• To balance previous periods of low inflation

What challenge are central banks facing with their monetary policy?

• Reducing interest rates

• Generating sufficient inflation

• Increasing government spending

• Controlling currency exchange rates

What shift in focus has occurred in central bank policy regarding inflation?

• From high inflation to low inflation

• From currency stability to economic growth

• From deflation to hyperinflation

• From low inflation to high inflation