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Jobs-inflation trade-off hard to spot under good monetary policy - BoE's Tenreyro

Jobs-inflation trade-off hard to spot under good monetary policy - BoE's Tenreyro
FILE PHOTO: A man walks past the Bank of England in the City of London, Britain, February 7, 2019. REUTERS/Hannah McKay -
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Hannah Mckay(Reuters)
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MANCHESTER, England (Reuters) – Economists will find it hard to identify the relationship between inflation and the amount of slack in the economy when central banks are pursuing optimal monetary policy, Bank of England policymaker Silvana Tenreyro said on Tuesday.

“That you don’t see a relation between inflation and slack is precisely what you’d expect when policymakers are optimising,” Tenreyro told the European Economics Association’s annual conference in Manchester.

“If monetary policy successfully offsets all other shocks, the data only show the response to the cost shocks, which trace out the wrong slope,” she added in her presentation.

(Reporting by David Milliken, editing by Andy Bruce)

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