Central banks haven't got it wrong

Forecasts of economic doom are premature and central bank-bashing is misplaced

Central banks in advanced economies today are in thrall to the conflict in Ukraine. Emerging market central banks, in turn, are in thrall to the actions taken by the US Federal Reserve. Those who fault central banks for their response to inflation in recent months seem to gloss over these facts.

During the global financial crisis of 2007, central banks knew what they had to do — loosen their monetary policy and keep doing so. Likewise, during the pandemic. Now, the course is nowhere near as clear.

The conflict in Ukraine has rendered the conduct of monetary policy extremely difficult. There is