EconPapers    
Economics at your fingertips  
 

A Post Keynesian view of central bank independence, policy targets, and the rules versus discretion debate

L. Randall Wray

Journal of Post Keynesian Economics, 2007, vol. 30, issue 1, 119-141

Abstract: This paper addresses three monetary policy issues—policy independence, choice of targets, and rules versus discretion. According to the new monetary consensus, the central bank needs policy independence to build credibility, the operating target is the overnight interbank lending rate, and the ultimate goal is price stability. An alternative view is presented, arguing that an effective central bank cannot be independent as conventionally defined, where effectiveness is indicated by the ability to hit an overnight nominal interest rate target. Discretionary policy and conventional views of central bank ability to achieve traditional goals such as robust growth, low inflation, or high employment are rejected. Thus, the paper returns to Keynes's call for low interest rates and euthanasia of the rentier.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
http://hdl.handle.net/10.2753/PKE0160-3477300106 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: A Post-Keynesian View of Central Bank Independence, Policy Targets, and the Rules-versus-Discretion Debate (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mes:postke:v:30:y:2007:i:1:p:119-141

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/MPKE20

DOI: 10.2753/PKE0160-3477300106

Access Statistics for this article

More articles in Journal of Post Keynesian Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

 
Page updated 2025-03-19
Handle: RePEc:mes:postke:v:30:y:2007:i:1:p:119-141