The topic of central banks and their role in controlling inflation has been a recurring theme in IELTS Writing Task 2, appearing approximately 3-4 times annually in recent years. Understanding how to tackle this economic topic is crucial as it frequently appears in various forms, from discussing monetary policies to exploring the relationship between role of central banks in controlling inflation.
Central bank governors discussing monetary policy to control inflation
Task Analysis and Sample Question
Some people believe that central banks should focus primarily on controlling inflation, while others argue they should have broader responsibilities for managing the economy. Discuss both views and give your opinion.
This question requires analyzing different perspectives on the central banks’ role in regulating economy while presenting a balanced argument and personal stance.
Band 8.5 Sample Essay
The debate over central banks’ primary responsibilities has intensified in recent years, with some advocating for a narrow focus on inflation control while others support a more comprehensive approach to economic management. In my view, while inflation control is crucial, central banks should maintain broader economic oversight.
Those supporting an inflation-centric approach argue that price stability is fundamental to economic health. When central banks concentrate solely on controlling inflation through interest rate adjustments and monetary supply management, they can more effectively maintain currency value and protect savings. This specialized focus prevents mission creep and ensures clear accountability in monetary policy implementation.
However, proponents of broader responsibilities emphasize that modern economies require more comprehensive oversight. Central banks can better serve national interests by monitoring multiple indicators, including employment rates, GDP growth, and financial stability. The impact of central bank policies on national currency value extends beyond mere inflation control, affecting various aspects of economic well-being.
I believe central banks should maintain wider economic responsibilities while prioritizing inflation control. The interconnected nature of modern economies means that focusing solely on inflation could overlook other crucial economic indicators that affect overall stability. For instance, the 2008 financial crisis demonstrated how narrow focus on inflation targets failed to prevent broader economic instability.
In conclusion, while inflation control remains vital, the role of central banks today must encompass broader economic management to ensure comprehensive financial stability and sustainable growth.
Band 6.5 Sample Essay
Central banks are important institutions in every country’s economy. Some people think they should only control inflation, but others want them to do more things. I will discuss both ideas and give my opinion.
First, many people say central banks should focus on keeping prices stable. When prices go up too fast, it makes life difficult for everyone, especially poor people. Central banks can use interest rates to stop prices from rising too much. This is their most important job because inflation can destroy an economy.
However, other people think central banks need to do more than just control inflation. They say that banks should also help create jobs and make sure the economy grows. For example, sometimes the economy is weak, and central banks can help by lending money to businesses. This helps more than just watching inflation.
I think central banks should do both jobs. They need to control inflation because it is very important, but they cannot ignore other economic problems. The economy is like a big machine with many parts, and central banks need to watch all of them.
In conclusion, while controlling inflation is very important, I believe central banks should also help manage other parts of the economy. This will make the whole country stronger.
Key Vocabulary
- Monetary policy (n) /ˈmʌnɪtəri ˈpɒləsi/ – The actions of a central bank to control money supply
- Interest rate (n) /ˈɪntrəst reɪt/ – The cost of borrowing money
- Currency value (n) /ˈkʌrənsi ˈvæljuː/ – The worth of money in terms of purchasing power
- Financial stability (n) /faɪˈnænʃəl stəˈbɪləti/ – The condition of a financial system functioning properly
- Mission creep (n) /ˈmɪʃən kriːp/ – The gradual expansion of a project beyond its original goals
For further practice, consider writing essays on related topics such as:
- The effectiveness of different monetary policies
- The relationship between interest rates and economic growth
- Digital currencies and central bank regulations
Share your practice essays in the comments for feedback and discussion.
