CENTRAL BANK INDEPENDENCE: A RIGGED DEBATE BASED ON FALSE POLITICS AND ECONOMICS
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Abstract
ABSTRACT
The case for central bank independence is built on an intellectual two-step. Step one argues there is a problem of inflation prone government. Step two argues independence is the solution to that problem. This paper challenges that case and shows it is based on false politics and economics. The paper argues central bank independence is a product of neoliberal economics and aims to institutionalize neoliberal interests. As regards economics, independence rests on a controversial construction of macroeconomics and also fails according to its own microeconomic logic. That failure applies to both goal independence and operational independence. It is a myth to think a government can set goals for the central bank and then leave it to the bank to impartially and neutrally operationalize those goals. Democratic countries may still decide to implement central bank independence, but that decision is a political one with non-neutral economic and political consequences. It is a grave misrepresentation to claim independence solves a fundamental public interest economic problem, and economists make themselves accomplices by claiming it does.
INDEPENDENCIA DEL BANCO CENTRAL: UN DEBATE AMAÑADO BASADO EN POLÍTICA Y ECONOMÍA FALSAS
RESUMEN
La cuestión de la independencia del banco central consiste en un proceso intelectual de dos fases. En la primera fase se argumenta que existe el problema de que el gobierno es proclive a la inflación. En la segunda fase se señala que la independencia del gobierno es la solución a este problema. En este artículo desafiamos esta cuestión y se muestra que se basa en política y economía falsas. Argumentamos que la independencia del banco central es un producto de la economía neoliberal y que aspira a institucionalizar los intereses neoliberales. En lo que concierne a la economía, la independencia se basa en una construcción controvertida de la macroeconomía y también fracasa de acuerdo con su propia lógica microeconómica. Ese fracaso aplica tanto para la independencia del objetivo como para la operativa. Es un mito pensar que el gobierno puede establecer objetivos para el banco central y luego permitir que éste los opere de forma imparcial y neutral. Los países democráticos pueden decidir implementar la independencia del banco central, pero la decisión es política y no es neutral en sus consecuencias económicas y políticas. La proposición de que la independencia resuelve un problema económico de interés público fundamental es una interpretación equivocada grave y los economistas se vuelven cómplices al sostener que en efecto lo resuelve.
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