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ECB Doublespeak Dictionary: Price Stability

January 12, 2011

The European Central Bank (ECB) recently presented two “educational” games which should teach how the ECB policy works. President of the ECB, Trichet, gave a speach on this occasion (you can download it as pdf file). Nothing really interesting; I only want to point to the term price stability which he mentioned.

Trichet, in his speech, uses confused definition of price stability: “But perhaps it wasn’t so easy to keep inflation low and stable, in line with our definition of price stability: less than 2%, but close to 2%.” So according to Trichet, price stability is inflation of about 2%. Inflation here means rise in prices, you will certainly agree. So then this translates as: Price stability is 2% rise in prices. In other words, president of the ECB uses term price stability for what is actually stability of rise in prices. That is doublespeak, as Orwell could call it. I wonder if the ECB uses it on purpose, or if they really are so confused.

(Thanks to Mostly Economics, which came with the information on these two games.)

Update (20th January): Now I learned that Orwell didn’t use “doublespeak”, at least not in his novel 1984. The word, however, was inspired by “newspeak” and “doublethink”, words which Orwell did use in the novel.

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