ContextSpeech by the Bundesbank President to students at a monetary and financial colloquium of the Karlsruhe Institute of Technology, where he studied.
Why it mattersAn unusual Bundesbank speech asking when inflation is too low, not only too high.
Problems raised
Inflation could be too low as well as too high.
Expectations could become unanchored.
Headline inflation is noisy.
Solutions proposed
Respond decisively if expectations drift.
Focus on underlying inflation, such as core inflation.
