Most monetary economists would agree that a central bank's first and foremost job is price stability, after which subordinate goals like managing economic shock

Most monetary economists would agree that a central bank's first and foremost job is price stability, after which subordinate goals like managing economic shocks can be pursued. Former Fed board member Frederic Mishkin wrote a paper outlining objectives for his perfect central bank, and price stability was his central tenet [1]. And the ECB has been following this. It's actually even in the ECB charter Article 105(1) - (paraphrased by the ECB website [2]) - "Without prejudice to the objective of price stability", the Eurosystem will also "support the general economic policies in the Community with a view to contributing to the achievement of the objectives of the Community". These include a "high level of employment" and "sustainable and non-inflationary growth". On the other hand, the Federal Reserve doesn't have a charter explicitly stating price stability as the foremost goal. In fact the 1978 Humphrey-Hawkins Act basically legislates dual goals - full employment and price stability - which could be seen as conflicting (in the context of monetary policy). [3] In any case, the Fed has a lot of discretion regarding their policy direction, whereas the ECB's charter is more or less unambiguous. [1] Mishkin's paper - What Should Central Banks Do? http://research.stlouisfed.org/publications/review/00/11/0011fm.pdf http://research.stlouisfed.org/publications/review/00/11/001... [2] ECB Websit talking about the "Objective of Monetary Policy" - http://www.ecb.int/mopo/intro/html/objective.en.html http://www.ecb.int/mopo/intro/html/objective.en.html [3] Discussion about the goals of US monetary policy - http://www.frbsf.org/econrsrch/wklyltr/wklyltr99/el99-04.html http://www.frbsf.org/econrsrch/wklyltr/wklyltr99/el99-04.htm...