• Bloomberg


Central banks need to look at more than just current inflation rates to develop policies that foreclose on economic bubbles before they occur, Bank of Japan Gov. Masaaki Shirakawa said Wednesday.

“If we focus narrowly on the current observed inflation rate, there is a risk that the necessary monetary policy adjustments might be delayed, inducing large fluctuations in economic activities,” Shirakawa said in a speech in Tokyo. “It is important to design a policy and institutional framework less prone to the formation of a bubble” based on forecasts rather than actual results.

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