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Interview on inflation with European central bank economist Jürgen Stark

Submitted by Kilpinen on Fri, 06/27/2008 - 12:59
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http://www.spiegel.de/international/business/0,1518,562281,0...

SPIEGEL: Prices have not risen more sharply in the United States than they have in Europe, and yet the Federal Reserve (the US central bank) has lowered interest rates. Was that a mistake?

Stark: I'd rather not comment. We are responsible for our monetary area. Price stability begins at home.

SPIEGEL: Nevertheless, you feel the consequences of US monetary policy. The policies of easy money under former Federal Reserve Chairman Alan Greenspan caused the current crisis on the financial markets. It's possible that it will happen again.

Stark: There are some lasting principles in monetary policy. As far back as 1993, (celebrated economist) Irving Fisher said that "easy money" is the root of all exaggeration. Interest rates around the world have been too low for too long

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