Larry Elliott reported the proposal Danny Blanchflower and I made last week for reform of the Bank of England Monetary Policy Committee in the Guardian today:
The full report on this on this blog is here.
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Typo Shake up in the title . K and L next to each other.
Changed – thanks
Well done. It is good that your ideas are generating a national discussion.
While in last week’s blog I wasn’t sure about your specific solution, there is no doubt of the big message: the MPC in its current form is not constituted in a way to best serve the economy. It needs reform.
What’s actually interesting here is that Larry Elliott’s article is entirely a rewrite of the press release. There’s no opinion – and certainly no approval. Does Larry not agree?
We spoke
He agrees
But he sees little chance of it happening
I would suggest more like Clive so representatives of e.g. agriculture, universities, trade unions, business (not finance! – real business), pensioners, etc. If you treat it like a jury or citizens assembly then all the evidence is that people take the responsibility seriously and attempt to get the best outcome. You would have to watch the City don’t get in the back door as ‘advisors’ to the MPC members.
Lord Adair Turner, who is hardly a socialist revolutionary, gave a lecture in Dublin in April 2016 I think, where he argued that in addition to deciding on interest rates, the MPC should also decide each month how much funds should be credited or debited to the Ways and Means account. So most of the time it would be a credit giving the Chancellor funds to spend, but in the case of inflation due to over-heating it would be a debit (i.e. forcing the Chancellor to reduce spending or increase tax. This would be direct funding and gets rid of the QE charade. He had looked at Japan in great detail and was explicit that the Japanese National Debt was never going to be repaid and what was owned by the Bank of Japan (more than half of it) should be written off.
Interesting
But maybe the Consolidated Fund more relevant now