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The Promise of Fiscal Money

ATHENS – Western capitalism has few sacred cows left.

It is time to question one of them: the independence of central banks from elected governments.

The rationale for entrusting monetary policy fully to central banks is well understood: politicians, overly tempted during the electoral cycle to create more money, pose a threat to economic stability.

Project Syndicate 3c opinion LLLLL logoWhile progressives have always protested that central banks can never be truly independent, because their autonomy from elected officials increases their dependence on the financiers they are meant to keep in check, the argument in favor of removing monetary policy from democratic politics has prevailed since the…

Setting aside the political controversy, central bank independence is predicated on an…

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