FT Alphaville » On price stability during an ‘abundance shock’
Everybody loves price stability.
Everybody expects price stability.
Everybody believes price stability is something they are entitled to.
But what if price stability comes at a cost? What if the act of
enforcing price stability transforms what should be a variable into a
constant at the cost of bleeding variability and volatility elsewhere?
What if price stability isn’t what we thought it was.
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