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Federal Reserve Policies Aimed at Creating Price Stability Bring About Economic Instability

Federal Reserve Policies Aimed at Creating Price Stability Bring About Economic Instability
The Marriner S. Eccles Federal Reserve Board building in Washington, on March 20, 2022. Daniel Slim/AFP via Getty Images
Frank Shostak
&
Mises Institute
|Updated:
Commentary 

For most economists and politicians, the role of central bank authorities is to make the economy as stable as possible. What do they mean by economic stability? Economic stability refers to an absence of excessive fluctuation, so an economy with constant output growth and low and stable price inflation is likely to be regarded as stable.

Frank Shostak, Ph.D., is an associated scholar of the Mises Institute. His consulting firm, Applied Austrian School Economics, provides in-depth assessments and reports of financial markets and global economies. He has taught at the University of Pretoria and the Graduate Business School at Witwatersrand University.
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