Bernanke Says Central Bank Independence Promotes Stable GrowthJoshua Zumbrun
Federal Reserve Chairman Ben S. Bernanke said policy making independence for the central banks in the U.S. and Mexico has helped curb inflation and ensure more stable economic growth.
“As in Mexico, the benefits of central bank independence in the United States have included low inflation, well-anchored inflation expectations, and increased policy credibility, which contribute to a more stable overall economic environment,” Bernanke said today in remarks in Mexico City.
“Indeed, during the recent financial crisis and the ensuing recession, the Fed has been able to take aggressive monetary policy actions to help stabilize the economy without dislodging longer-term inflation expectations,” he said in a pre-recorded video at a Banco de Mexico conference celebrating the Mexican central bank’s 20th year of independence.
As central bank chairman since 2006, Bernanke has advocated keeping the Fed free of political interference while increasing the information the central bank releases on its deliberations and economic forecasts.
Bernanke has given television interviews and appeared at town hall-style meetings. He toured a Philadelphia shipyard and a Tasty Baking Co. cupcake factory in 2010 and traveled to El Paso, Texas, in 2011 to speak to soldiers at Fort Bliss. That year he also began holding press conferences.
“In democratic societies, central bank independence must be accompanied by accountability to the public and its representatives,” Bernanke said today.
The Fed chairman didn’t discuss the outlook for the U.S. economy or monetary policy in his remarks today.
Bernanke praised Banco de Mexico Governor Agustin Carstens, saying “his leadership in economic policy, in several key roles, has been instrumental in solidifying the progress that Mexico has made over the past two decades.”
The independence of Mexico’s central bank allowed it to respond aggressively to the 2007-2009 financial crisis, Bernanke said.
“The inflation credibility enjoyed by the Bank of Mexico allowed it to counter economic weakness by easing monetary conditions,” he said.