How the ECB sees inflation — as a big purple monster | FT Alphaville

How the ECB sees inflation — as a big purple monster

Taking a line from the Fed’s tutorial notebook — the European Central Bank has made an educational video aimed at explaining the concept of price stability to “young teenagers.”

It weirdly combines cartoons suitable for six year-olds with dialogue like:

Price stability is defined by the governing council of the European Central Bank as the year-on-year increase in the harmonised index of consumer prices for the euro area of below 2 per cent.

But at least the student protagonists get to travel from their (boring) economics classroom, back in time to what looks like the Weimar Republic, and meet the inflation monster — a toadlike purple creature:

And then they visit the ECB and learn that those central bankers have the whole price stability thing under control. In fact, they’ve shrunk the inflation monster to a much cuter size, and stuck him in a little jar. And they keep him in a desk drawer, along with his beastly cousin, deflation.

Someone call the cartoon monster welfare helpline! :


Related links:
The ECB as liquidity monster – FT Alphaville
Letter to a Seventh Grader – Congressional Budget Office