• 3 minutes Could Venezuela become a net oil importer?
  • 7 minutes Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 12 minutes Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf
  • 14 hours Could Venezuela become a net oil importer?
  • 6 hours Reuters: OPEC Ministers Agree In Principle On 1 Million Barrels Per Day Nominal Output Increase
  • 18 hours Tesla Closing a Dozen Solar Facilities in Nine States
  • 1 min Oil prices going Up? NO!
  • 14 hours Gazprom Exports to EU Hit Record
  • 16 hours EU Leaders Set To Prolong Russia Sanctions Again
  • 14 hours Could oil demand collapse rapidly? Yup, sure could.
  • 14 hours Oil Buyers Club
  • 18 hours Why is permian oil "locked in" when refineries abound?
  • 7 hours Oil prices going down
  • 24 hours China’s Plastic Waste Ban Will Leave 111 Million Tons of Trash With Nowhere To Go
  • 23 hours Saudi Arabia plans to physically cut off Qatar by moat, nuclear waste and military base
  • 17 hours EVs Could Help Coal Demand
  • 5 hours Russia's Energy Minister says Oil Prices Balanced at $75, so Wants to Increase OPEC + Russia Oil by 1.5 mbpd
  • 12 hours Saudi Arabia turns to solar
  • 27 mins Battle for Oil Port: East Libya Forces In Full Control At Ras Lanuf

Why Central Bank Independence is not all it's Cracked up to be

In 2009 a number of prominent economists signed a petition arguing for central bank independence. I was less enthusiastic writing:

There is nothing magical about independence that makes for low-inflation.

…The primary reason that independent central banks are better at controlling inflation is that absent direct political control the default selection mechanism favors bankers, i.e. lenders, people whose interests make them more favorable towards lower inflation.

Thus, independence is a political decision that favors lenders in the decisions of monetary policy. Now, depending on the alternatives, there may be good reasons for making this choice but we should not fool ourselves into thinking that we have depoliticized money. We should not be surprised, for example, that “independent” central banks tend to make lender of last resort decisions that protect banks and bankers.

Click here to read the full article.



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News