The Central Banker’s New Clothes

Created
Tue, 18/05/2021 - 20:10
Updated
Tue, 18/05/2021 - 20:10

The fact that fiscal policy is now driving monetary policy in the United Kingdom cannot be admitted, and not only to maintain the perception of central-bank independence. More fundamentally, admitting that the Bank of England is an agent of the Treasury would destroy the intellectual edifice of current macroeconomic theory.