, Columnist
Maybe Central Banks Are Too Independent
Congress might want to consider placing limits on the Fed.
A conundrum of governance.
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Throughout the developed world, central banks enjoy a large measure of independence. This is considered desirable because it guards against elected officials’ preference for overly easy monetary policy, as a means to generating jobs and votes.
But what if the central bank wants easier money than politicians do? This has been the case in the U.S. for much of the past decade, and it raises important questions about how independence should be defined.