Editing Central bank (section)

=== Price stability ===
The primary role of central banks is usually to maintain price stability, as defined as a specific level of inflation. [[Inflation]] is defined either as the devaluation of a currency or equivalently the rise of prices relative to a currency. Most central banks currently have an [[inflation targeting|inflation target]] close to 2%.

Since inflation lowers [[real wage]]s, [[Keynesian economics|Keynesians]] view inflation as the solution to involuntary unemployment. However, "unanticipated" inflation leads to lender losses as the real interest rate will be lower than expected. Thus, Keynesian monetary policy aims for a steady rate of inflation.

Central banks as monetary authorities in representative states are intertwined through globalized financial markets. As a regulator of one of the most widespread currencies in the global economy, the US Federal Reserve plays an outsized role in the international monetary market. Being the main supplier and rate adjusted for US dollars, the Federal Reserve implements a set of requirements to control inflation and unemployment in the US.<ref>[https://www.reuters.com/markets/europe/central-banks-raise-rates-again-fed-drives-global-inflation-fight-2022-09-22/] {{Webarchive|url=https://web.archive.org/web/20221210132225/https://www.reuters.com/markets/europe/central-banks-raise-rates-again-fed-drives-global-inflation-fight-2022-09-22/|date=10 December 2022}}, Central banks raise rates again as Fed drives global inflation fight</ref>