The FT reports this morning that:
Ed Balls, one of the chief architects of UK central bank independence, has revisited his thinking on the issue and now holds that in the post-crisis world the Bank of England's independence should be reined back.
In a paper for the John F Kennedy School of government at Harvard University, Mr Balls, the former UK minister and unexpected star of the BBC's Strictly Come Dancing show, says the old assumption no longer holds that the more independence given to a central bank the better.
As the FT notes, Balls' research found that:
when countries had .... given political independence to central banks – to set their own targets, hire their top people and prevent the government from changing top staff regularly – this had almost no economic benefits.
During the brief moment when I was, supposedly, the author of Corbynomics, I argued this case quite strongly and got some prominence for doing so. At the time the likes of Yvette Cooper argued that I would be sending the UK towards a Zimbabwean future for saying so.
I won't ask for an apology because I know none will be forthcoming but knowing both my political and economic arguments have now been justified does give rise to a certain degree of satisfaction, I admit.
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the likes of Yvette Cooper
…aka Mrs Ed Balls. Just saying…
It would be much nicer and more significant if Phillip Hammond agreed with you but hopefully Balls still has some traction in the Labour party and might be able to change attitudes.
Ed’s position on Today was more nuanced:
“For his part, Mr Balls told the Today programme that in order to protect its operational independence, the Bank needed “more political support and accountability”. To that end, he said, there should be a “systemic risk body”, chaired by the chancellor, to oversee policy.” BBC
In other words, take its independence away
Looking at the BoE website the other day, I was interested to note (though not totally surprised) that a member of the Treasury (unnamed) attends MPC meetings. I don’t know if that person gets to vote, or is there as an observer, but it seems to me that it’s a reminder of who is really in charge.
Well, well: Yvette Cooper regards Mugabe Economics as a source of political insults.
Someone, somewhere, profited from the use of ATOS in a campaign to strip the disabled of their benefits: I wonder if she could ask the minister responsible for that – or enquire about her former colleagues’ non-executive directorships in their lucrative retirement from politics.
One might even say that her ‘Zimbabwe’ criticism was a bad Harare day.
It hasn’t really been the same since Montague Norman.
Well done Richard. Your understanding of economics continues to confound the experts.
Richard I think you will find rather amusing http://thewire.in/80987/withdraw-taxes-says-organisation-claims-come-demonetisation-idea/
I think the arguments have some merit
Such as?
And how does the Bank of International Settlements fit into the picture?
Since when has “vindication” been down to whether Ed Balls agrees? 🙂
sorry I meant to quote “justified”