The Importance of Full Employment and Low Inflation

A quick look at the difference between UK and US Monetary Policy, in particular, which is the most important objective to target.

This dilemna is important because the UK could be experiencing inflation and lower growth, therefore, the MPC may be tempted to keep interest rates too high in order to target low inflation. By contrast the Fed have an objective of both inflation and full employment. The Fed have cut interest rates very significantly in recent weeks.

Should Low inflation be the Most important objective for Government?

Previous Essays on Full Employment

• Should the Government’s Primary Objective be Low Inflation?
• Should the Primary objective of the Government be Full Employment