Central bankers promote stability?

Virginia Postrel writes in the NY Times [via Instapundit]:

"The most fundamental policy recommendation put forth by Milton Friedman," Mr. Bernanke said, "is the injunction to policy makers to provide a stable monetary background for the economy," avoiding both inflation and deflation.

"Monetary stability actively promotes efficiency and growth," Mr. Bernanke said. It also makes the economy more resilient, because when people are not afraid of general inflation, they adapt more easily to shocks like rapid jumps in energy prices.

Over the last two decades, central bankers here and abroad have worked to keep inflation low and stable, and they have largely succeeded. Back in the 1970's, Milton Friedman didn't think that was politically possible. About that one thing, perhaps, he was wrong.

Here is where the definition of inflation becomes very important.

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