Ex-ECB's Trichet Urges `Vigilance' on Spike in Inflation

The video discusses the current inflation trends in the USA and Europe, highlighting the significant spike in inflation in the USA and its global implications. It contrasts this with Europe's situation, where core inflation remains low despite rising oil and commodity prices. The European Central Bank (ECB) views the current inflation as transitory and has introduced a new strategy with a symmetric 2% inflation target. The video also emphasizes the importance of central banks maintaining credibility and their success in averting deflationary risks over the past decade.

What is the main reason for the inflation spike in Europe according to the transcript?

• Technological advancements

• Government fiscal policies

• Decrease in consumer demand

• Increase in oil and commodity prices

Why is it important for central banks to maintain credibility?

• To increase government revenue

• To ensure public trust and effective monetary policy

• To reduce unemployment rates

• To promote technological innovation

What was a significant achievement of central banks in the past decade?

• Eliminating unemployment

• Increasing GDP growth

• Preventing deflationary risks

• Achieving zero inflation

What is the new inflation target set by the ECB?

• 2%

• 1.5%

• 2.5%

• 3%

Which major economies have adopted the 2% inflation target?

• Saudi Arabia, UAE, Qatar, and Kuwait

• USA, UK, Europe, and Japan

• Australia, Canada, Mexico, and South Africa

• China, India, Brazil, and Russia