IELTS Writing Task 2 Sample Essays: The Role of Central Banks in Modern Economy (Band 6.5-8.5)

Central banks and their functions have become an increasingly popular topic in IELTS Writing Task 2, particularly in essays focusing on economics and financial policy. Based on analysis of past exam questions and trends on leading IELTS preparation websites, this topic has appeared in various forms over the last 5 years, especially in questions about economic stability and government policies.

Before exploring how central banks respond to inflation, let’s examine a common IELTS Task 2 question on this subject:

Some people believe that central banks should focus primarily on controlling inflation, while others argue they should have broader responsibilities including promoting employment and economic growth. Discuss both views and give your opinion.

Analysis of the Question

This question requires candidates to:

• Discuss two contrasting views about central banks’ roles
• Consider the balance between inflation control and broader economic responsibilities
• Present and justify a personal opinion
• Provide relevant examples and explanations

The Role of Central Banks in Modern Economy

Sample Essay 1 (Band 8.5)

The debate over central banks’ primary responsibilities has intensified in recent years, with some advocating for a narrow focus on price stability while others support a broader mandate. In my view, while inflation control should remain paramount, central banks must also consider wider economic objectives.

Those who support a singular focus on inflation control argue that price stability is fundamental to economic health. They contend that when inflation is kept in check, businesses can plan effectively, and consumers maintain purchasing power, creating an environment conducive to sustainable growth. For instance, the European Central Bank’s success in maintaining price stability has contributed significantly to the Eurozone’s economic stability, demonstrating how role of government intervention in controlling inflation can be effective.

However, proponents of a broader mandate emphasize that modern economies face complex challenges requiring comprehensive responses. They argue that central banks should actively promote employment and economic growth alongside managing inflation. The Federal Reserve’s dual mandate, which explicitly includes maximum employment alongside price stability, has proven effective during economic crises, where focusing solely on inflation might have deepened recessions.

In my opinion, while controlling inflation should remain the primary objective, central banks cannot ignore their broader economic impact. The interconnected nature of modern financial systems means that role of financial markets in managing inflation must be considered alongside other economic factors. Furthermore, the emergence of new financial technologies, as seen in the role of fintech in consumer lending, has created additional complexities that central banks must address.

To conclude, while inflation control should remain central banks’ primary focus, they must maintain flexibility to address broader economic challenges. This balanced approach ensures both monetary stability and overall economic health.

Central Bank Policy Implementation and Economic Impact

Sample Essay 2 (Band 6.5)

Central banks’ roles in the economy are important to discuss. Some people think they should only control inflation, but others want them to do more things. I will discuss both sides and give my opinion.

First, many people say inflation control is the most important job. When prices go up too fast, it’s bad for everyone. People can’t buy things they need, and businesses can’t plan properly. For example, when inflation is high in my country, many people suffer because their money becomes worth less.

However, other people think central banks should do more than just control inflation. They say banks should help create jobs and make the economy grow. This is because sometimes the economy needs help in different ways. For example, during COVID-19, many central banks helped businesses by giving them money.

In my opinion, I think central banks should do both jobs. Controlling inflation is very important, but they can’t ignore other problems in the economy. When they only focus on one thing, they might miss other important problems that need fixing.

In conclusion, while controlling inflation is very important, central banks should also help with other economic problems. This way, they can make sure the whole economy stays healthy.

Key Vocabulary

1. monetary policy (n) /ˈmʌnɪtəri ˈpɒlɪsi/ – actions of a central bank to control money supply
2. inflation (n) /ɪnˈfleɪʃən/ – general increase in prices over time
3. mandate (n) /ˈmændeɪt/ – official order or commission to do something
4. economic stability (n) /ˌiːkəˈnɒmɪk stəˈbɪlɪti/ – condition of an economy with minimal fluctuations
5. price stability (n) /praɪs stəˈbɪlɪti/ – situation where general price level remains relatively constant

Practice Exercise

Try writing your own essay on this topic or a related question:
“Do you think central banks should be completely independent from government control? Give reasons for your answer and include relevant examples from your knowledge or experience.”

Share your practice essays in the comments section for feedback and discussion.