Jakarta ● Fri, August 12 2022
A man who needs a heart transplant consults his doctor. Says the doctor, "I can give you the heart of a five-year-old boy." "Too young." "How about that of a 40-year-old investment banker?" "They don't have a heart." "A seventy-five-year-old central banker?" "I'll take it." "Why?" "It's never been used!"
The joke , conveyed by then-president of the European Central Bank Mario Draghi, is relevant today when central bankers are confronted with a dilemmatic situation in combating inflation and preserving the value of currency. It gives insight into how central bankers should be coolheaded and not crack under pressure in enacting monetary policy through one of three stances.
An accommodative stance is taken to stimulate economic growth by adding money supply and reducing the interest rate or keeping it low. During the economic contraction due to the COVID-19 pandemic, this stance generally has been taken by central banks worldwide.
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