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It reviews historical sources of inflationary behavior, emphasizes how high inflation erodes purchasing power and increases uncertainty, and describes improved economic performance associated with reduced inflation. The commentary also addresses fiscal deficits as a challenge for monetary policy, concluding they complicate decisions but do not necessarily undermine 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does the text emphasize maintaining price stability?","Question",{"text":112,"@type":113},"It argues that low and stable inflation best supports sustained economic growth and prosperity while reducing costly distortions and uncertainty.","Answer",{"name":115,"@type":110,"acceptedAnswer":116},"What historical pattern does the commentary use to explain inflation?",{"text":117,"@type":113},"It describes how, when governments faced pressure, they often yielded to the temptation to weaken money through excessive printing or debased coinage, leading to inflationary outcomes.",{"name":119,"@type":110,"acceptedAnswer":120},"Do large budget deficits undermine central banks’ success according to the remarks?",{"text":121,"@type":113},"The commentary states that deficits are undesirable and may add complexity to monetary policy decision-making, but they do not need to undermine maintaining price stability.","https://schema.org",{"og:url":83,"og:type":124,"og:title":65,"og:site_name":95,"og:description":67},"article",{"robots":126,"canonical":83},"index,follow",{"doc_id":128,"site_id":62},324225,1790072259,{"code":4,"msg":5,"data":131},{"doc_id":128,"user_id":132,"nickname":92,"user_avatar":133,"doc_module":4,"category_id":39,"category_name":40,"doc_title":65,"doc_description":67,"doc_content":134,"file_id":135,"file_url":136,"file_type":137,"file_size":138,"view_count":52,"is_deleted":4,"is_public":8,"is_downloadable":8,"audit_status":8,"page_count":24,"language":139,"language_code":63,"site_id":62,"html_lang":63,"table_of_contents":140,"faqs":141,"seo_title":142,"seo_description":67,"update_tm":143,"read_time":144,"preview_page_count":4},687197207057,"https://ap-avatar.wpscdn.com/davatar_29158cc5080c5b710cf443261637dec0","# The Power of Price Stability\n\nby Sandra Pianalto  \nIm besiningm thin yeoras pesi-dent and CEO of the Federal ReserveBank of Cleveland and as a participantof the Federal Open Market Committe,the Federal Reserve's policymakingarm.I will tell you that I have seenmore than a few twists and turns in thepath of the economy during that time.  \nThe economy has been expanding forthe past few years,but many peopleseem to think that,in spite of its funda-mental underlying strength,the econ-omy could face some challenges fromfiscal and trade deficits.Today,I wouldlike to explain how I think central bankscan best meet those challenges and pro-mote economic prosperity—by main-taining price stability,or low and stablerates of inflation.I will talk about threeaspects of this message.  \nFirst,we have achieved aglobal consen-sus that central banks should pursueprice stability.  \nSecond,while large budget deficits areclearly undesirableand may add somecomplexity to monetary policy decision-making.they do not need to undermineour success in maintaining price stability.  \nFinally,a firm commitment to price sta-bility is the best contribution monetarypolicy can make toward resolving thechallenges posed by extenal accountimbalances.  \nPlease note that the viewslexpresstoday are mine alone.I do not presumeto speak for any ofmy colleagues in theFederal ReserveSystem.  \n# ecONOMICCOMMCNTCIRY\n\n## ■ The Price Stability\n\nConsensus  \nLet me begin by explaining why Ibelieve we have achieved a global con-sensus in support of price stability.Weknow that central banks have a rathercheckered past when it comes to the pur-suit of price stability.Throughout humanhistory,when governments becameinvolved with money,inflation typicallyfollowed.That is because when eco-nomic times got tough,or budgets werepinched,govenments often yielded tothe temptation to cheapen the value ofmoney by printing too much of it,orsometimes by minting lighter coins.Per-haps they were trying to stimulate fastereconomic growth,or perhaps they weresimply trying to finance their ownspending without raising taxes.Butwhatever the reason,the result was thesame—economieseventually suffieredunder an inflationary policy.  \nEven as early as the 14th century,thedangers of inflation were discussed.InThe Inferno,Dante writes about the fateof counterfeiters and other \"falsifiers ofmoney”—the people who were responsi-ble for devaluing the currency.He placesthem in one of the deepest parts of hellAgain in the third book of his DivineComedy,Dante predicts aterrible fatefor two officials who debased their cur-rencies.According to a translator,Danteenvisioned this severe punishment notbecause he loved money,but because hebelieved that a sound coinage—or soundmoney—was an essential principle ofsocial order.  \nThankfully,we are not so severe withthose who create inflation today.But wedo understand that sooner or later,infla-tion introduces all sorts of costly  \nMay 1,2005  \nThe economy has been expanding forthe past few years,but concerns aregrowing over the pressures placed onit by fiscal deficits,current accountimbalances,and energy shocks.San-dra Pianalto,president and CEO ofthe Federal Reserve Bank of Cleve-land,explains why she thinks theFederal Reserve can best meet thosechallenges and promote economicprosperity by maintaining price sta-bility.This Commentary contains thetext of her remarks to the Levy Eco-nomics Institute of Bard College onApril 21,2005.  \neconomic distortions and uncertainty.When consumers and businesses cometo realize that the purchasing power oftheir money is declining,theylook forways to avoid holding that money.Those ofus who remember the 1970scan attest to the deep troubles broughton by spiraling inflation.  \nOver the past couple of decades,wehavescen growing public support for a returnto low inflation,not just in the UnitedStates,butaround the world.Inflation inthe industrialized countries fell from9 percent in the first halfof the 1980s to2 percent early in this decade.But ev","cbCaioNbr62g8Frh","https://ap.wps.com/l/cbCaioNbr62g8Frh","pdf",1011268,"English","# The Price Stability\n## Consensus\n## Monetary Policy in an Era of Fiscal Deficits: More Difficult, Not Impossible","[{\"question\":\"Why does the text emphasize maintaining price stability?\",\"answer\":\"It argues that low and stable inflation best supports sustained economic growth and prosperity while reducing costly distortions and uncertainty.\"},{\"question\":\"What historical pattern does the commentary use to explain inflation?\",\"answer\":\"It describes how, when governments faced pressure, they often yielded to the temptation to weaken money through excessive printing or debased coinage, leading to inflationary outcomes.\"},{\"question\":\"Do large budget deficits undermine central banks’ success according to the remarks?\",\"answer\":\"The commentary states that deficits are undesirable and may add complexity to monetary policy decision-making, but they do not need to undermine maintaining price stability.\"}]","The Power of Price Stability - by Sandra Pianalto - Economic Commentary | PDF",1789967374,13]