Don’t ask central banks to prick asset bubbles: it’s the government’s job

There are growing calls for the aims of monetary policy to be broadened to controlling booms and bubbles, as well as retail price inflation. Opponents argue that monetary policy is a blunt instrument for this purpose and regulatory instruments should be used instead. But the essential point is one of responsibility: such interventions are too important to be left to regulators, and can only be made by elected governments.