Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9
At least since the publication of ‘Rules rather than discretion’ by Nobel Prize winners Kydland and Prescott (1977), an undisputed principle in monetary economics is that central bankers should be politically independent. Politicians have an electoral incentive to jack-up the money supply to finance...
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| Format: | Article |
| Language: | English |
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Cambridge University Press
2017-01-01
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| Series: | Finance and Society |
| Online Access: | https://www.cambridge.org/core/product/identifier/S2059599900000431/type/journal_article |
| _version_ | 1797255778873114624 |
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| author | David Hollanders |
| author_facet | David Hollanders |
| author_sort | David Hollanders |
| collection | DOAJ |
| description | At least since the publication of ‘Rules rather than discretion’ by Nobel Prize winners Kydland and Prescott (1977), an undisputed principle in monetary economics is that central bankers should be politically independent. Politicians have an electoral incentive to jack-up the money supply to finance programmes the electorate favours, ignoring the inflation this will result in. Monetary policy is therefore best separated from fiscal policy, leaving the latter to politicians, while entrusting the former to central bankers, whose sole calling is to ensure moderate inflation and financial stability by determining the conditions (i.e., interest rate and collateral) under which private banks can borrow from the central bank. Although central banks’ independence might be undemocratic, it is nonetheless in the long-run interest of the citizenry. |
| first_indexed | 2024-04-24T22:11:16Z |
| format | Article |
| id | doaj.art-315015a590874c2ea2608ff321c170ee |
| institution | Directory Open Access Journal |
| issn | 2059-5999 |
| language | English |
| last_indexed | 2024-04-24T22:11:16Z |
| publishDate | 2017-01-01 |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Finance and Society |
| spelling | doaj.art-315015a590874c2ea2608ff321c170ee2024-03-20T08:20:15ZengCambridge University PressFinance and Society2059-59992017-01-0139910110.2218/finsoc.v3i1.1942Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9David Hollanders0University of Amsterdam, NetherlandsAt least since the publication of ‘Rules rather than discretion’ by Nobel Prize winners Kydland and Prescott (1977), an undisputed principle in monetary economics is that central bankers should be politically independent. Politicians have an electoral incentive to jack-up the money supply to finance programmes the electorate favours, ignoring the inflation this will result in. Monetary policy is therefore best separated from fiscal policy, leaving the latter to politicians, while entrusting the former to central bankers, whose sole calling is to ensure moderate inflation and financial stability by determining the conditions (i.e., interest rate and collateral) under which private banks can borrow from the central bank. Although central banks’ independence might be undemocratic, it is nonetheless in the long-run interest of the citizenry.https://www.cambridge.org/core/product/identifier/S2059599900000431/type/journal_article |
| spellingShingle | David Hollanders Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 Finance and Society |
| title | Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 |
| title_full | Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 |
| title_fullStr | Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 |
| title_full_unstemmed | Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 |
| title_short | Monetary policy as economic warfare - Yannis Varoufakis, Adults in the Room: My Battle With Europe's Deep Establishment, London, Bodley Head, 2017, 550 pp., £14.99 (pbk), ISBN 978-1-847-92446-9 |
| title_sort | monetary policy as economic warfare yannis varoufakis adults in the room my battle with europe s deep establishment london bodley head 2017 550 pp £14 99 pbk isbn 978 1 847 92446 9 |
| url | https://www.cambridge.org/core/product/identifier/S2059599900000431/type/journal_article |
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