A working paper, released by the IMF on April 22, finds that central banks with both a price and financial stability mandate cannot achieve both to the social optimal level due to time-lag factors.

"Ex-ante, [central banks] choose the socially optimal level of inflation. Ex-post, however [central banks] choose inflation above the social optimum to reduce the real value of private debt," write authors Kenichi Ueda and Fabián Valencia in the paper. "This inefficient outcome arises when macro