Philipp Heimberger: 'I think there is something wrong with prevalent monetary policy ideas when central banks protect their credibility by pushing economies deeper into recession' (Photo: Philipp Heimberger)

Interview

Central banks can't fight inflation alone — their tools are too blunt

Green Economy

by Wester van Gaal, Brussels,

To drive down inflation, central banks around the world have increased interest rates on an unprecedented scale.

By increasing the cost of borrowing, the banks are trying to raise unemployment and lower wage growth, which will further lower demand to a level equal to supply, especially for gas. In other words, make people poorer on average so they can spend less.

But as the world moves towards

Get EU news that matters

Back our independent journalism by becoming a supporting member

Already a member? Login here

Green Economy Interview

Author Bio

Wester is a journalist from the Netherlands with a focus on the green economy. He joined EUobserver in September 2021. Previously he was editor-in-chief of Vice, Motherboard, a science-based website, and climate economy journalist for The Correspondent.