Open Economy Macroeconomics
Margaret Thatcher started an aggressive disinflationary policy when she came to office as the UK’s prime minister in 1979. In October 1980, she delivered her famous “the lady’s not for turning” speech. What was the aim of this speech and how was it influenced by monetarist views on the importance of credibility and managing inflation expectations?
Assess the following statement: “during the financial crisis central banks significantly expanded their balance sheets through quantitative easing and this did not cause inflation expectations to become less firmly anchored to the inflation target, thus we can say that QE does not pose a danger to macroeconomic stability.”.
