How is inflation targeting of central banks related to unemployment and how is it implemented?

I was wondering of the details of the relation between inflation and unemployment and how central banks affect it. Do central banks have a role in pushing down prices? How does it work? If yes, how is it possible to push down prices with monetary policy when we barely saw any inflation with the quantitative easing following the financial crisis ten years ago? Or was it a prevention of an even more severe deflation? Thanks in advance!


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  • Googolplexking
    commented 2018-01-26 23:19:05 -0500
    Inflation is raising prices, which is pushing prices up. My personal opinion is that unemployment affects inflation and not the other way around (usually). During good times people want more things and want less money. During bad times people want more money and want less things.

    Also during times of really high inflation people generally don’t want to invest. Deflation rises the minimum real rate of return on nominal bonds/debt(most debt).
  • Lucas Pascalides
    published this page in Ask Prof. Wolff 2018-01-25 18:20:34 -0500

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