Affaires économiques
Fondation IDEA
In part one, I tried to disentangle the modern “trend” of depoliticizing important parts of the political life with a special reference to monetary policy and Central Banks (CBs). After a brief overview of the historical role of the CBs and the dominance of the new monetary consensus, I proceeded with the critical evaluation of the arguments in favor of Central Bank Independence (CBI) and the potentially high uncertainty involved in granting independence to a CB. In what remains, I will examine the distributional consequences of monetary policy and how the preferences of different socioeconomic groups translate into policies. Finally, I present a set of concrete “policy recommendations” towards the final goal of democratizing monetary policy. The proposals should not be seen as alternatives but rather as interlinked and mutually reinforcing.
Read the whole article on: http://www.fondation-idea.lu/2018/07/24/moving-away-from-democracy-opening-up-monetary-policy-choices-2-2/