(Bloomberg) — Bank of England policymaker Catherine Mann said the fragmenting global economy will leave countries more exposed to inflation shocks in future, posing a test for central banks.
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Mann said on a panel at the International Monetary Fund that central banks need to be on high alert because the “great moderation” — the years of stable inflation and low volatility — is over. As a result, they will need to exercise their independence more actively, she said Friday.
“A lot has been ascribed to central bank independence and inflation targeting,” Mann said about the Great Moderation. “However, global integration was also a very important ingredient. So a real concern is, moving forward, fragmentation.”
The former Citigroup Inc. chief global economist warned that “central banks are going to have to use their autonomy very effectively going…
