Independent conservative central bankers can credibly commit against inflation where politicians cannot

Evidence

Such reforms would ensure that government attempts to spend against the cycle would not happen in the first instance because the politicians in question would know that the central bank has credibly committed to holding the line on prices by being both institutionally protected and politically conservative. Thus the bank can “credibly commit” in a way that the politicians cannot. As a consequence, policy making should be delegated away from democratically elected politicians to independent conservative central bankers who will dish out the bad medicine when required because their jobs do not depend upon pleasing constituents—except, perhaps, their constituents in the financial sector who benefit from ultralow inflation—but that’s another story. — Mark Blyth, Austerity, 423

Categorization

• DEFINE: Defines the concept of credible commitment as it applies to central bank independence versus elected politicians.
• XREF: connects to: Independent central banks originated as a way to dodge democratic pressure. — Clara E. Mattei, Escape from Capitalism, 374; Ordoliberalism institutionalized competition policy and an independent central bank against parliamentary control — Mark Blyth, Austerity: The History of a Dangerous…, 364; Central bank independence shifted economic decision-making beyond electoral reach — Clara E. Mattei, Escape from Capitalism, 421 (+8 more)

Broader Connections

• Independent central banks originated as a way to dodge democratic pressure. #expands (0.85) — Clara E. Mattei, Escape from Capitalism, 374
• Central bank independence shifted economic decision-making beyond electoral reach #expands (0.85) — Clara E. Mattei, Escape from Capitalism, 421
• Reformers demand flexible exchange rates and growth-oriented central bank policy #contradicts (0.85)
• Ordoliberalism institutionalized competition policy and an independent central bank against parliamentary control #exemplifies (0.80) — Mark Blyth, Austerity, 364
• Central bank independence was formalized to exempt economic policy from democratic control #expands (0.80) — Clara E. Mattei, The Capital Order, 71
• Central bank independence was designed to insulate deflationary policy from democratic opposition. #expands (0.80) — Clara E. Mattei, Escape from Capitalism, 374
• Monetarist anti-inflation doctrine is politically motivated moral condemnation of welfare-state demands #complicates (0.80) — Jessica Whyte, The Morals of the Market, 337
• Neoliberals wanted an international order forcing anti-inflationary policy onto states #expands (0.75) — Dieter Plehwe, Quinn Slobodian & Philip Mirowski (eds.), Nine Lives of Neoliberalism, 425