European policymakers should study their peers

European policymakers should study their peers. America's Federal Reserve and the Bank of England were quick to deploy unconventional stimuli such as quantitative easing (QE), the purchase of government bonds with newly created money. They have also worried less about resurgent inflation, using forward guidance to reassure markets that they will take their time about raising interest rates. They have been proved right to be relaxed: inflation in both countries remains below targets of 2%. Their stimulus has compensated for overly tight fiscal policies and kept deflation at bay. The European Central Bank (ECB) reacted with admirable force to the global financial crisis. But it has dragged its feet since then. It has underestimated the threat of deflation, going so far as to raise interest rates in 2011 to choke off a non-existent threat of inflation. It continues to resist QE. The Economist on challenges facing the ECG. (VIEW LINK)