To be more bland, here’s a graph from 1993 paper by Alesina and Summers showing how inflation rate correlates with the independence of the central banks from the politics:
To me that chart looks a bit fishy if you see independence as being opposite of democracy. Given Germany the maximal score of indepence of the central bank when all of the executive board is appointed by people who are democratically accountable seems strange when there are countries like the US where a good chunk of the seats of the executive board aren’t chosen by people who are democratically accountable.
Whether or not you let banks (shareholders) decide about who gets appointed to the executive board of a central bank or let democratically accountable people decide is a question that’s distinct from whether those people are independent from the people who appointed them once they are appointed.
The graph seems to have been made in 1993 which is 3 years after the German channlor got the president of the Bundesbank to resign because of policy differences.
If a German political party would adopt in it’s platform NGDP targeting which Eliezer Yudkowsky recommended, they could focus on appointing people to the executive board that believe in NGDP targeting.
When it comes to Democratic accountability it also feels like you ignored the Elephant in the room. Democratic accountability is not just about election but it’s also about understanding what people do to be able to criticize their decisions. Removing the power to do trillion dollar deals in the dark from burocrats lists their power but might very well make the whole system more efficient.
I am not an economist, so it’s hard to me to judge the quality of the paper. In fact, I was just trying to show the kind of argument made for bank independence at the time. Feel free to check the paper for yourself: https://debis.deu.edu.tr/userweb//yesim.kustepeli/dosyalar/alesinasummers1993.pdf Section 2. is about measuring the central bank independence.
It seems to cite among others Bade and Parkin’s Central Bank Laws and Monetary Policy from 1982.
When it discusses Italy where shareholders have the right of proposing candidates and the government needs to approve them, it judges the government as having complete control.
In Germany where the Federal government appoints some members and the Bundesrat (body of the state governments) appoint others they judge the system as a self-perpetuating oligarchy. To the extend that they are it’s because the job they are doing is valued by the ruling parties in Germany so they listen to their recommendations about who to appoint.
To me that chart looks a bit fishy if you see independence as being opposite of democracy. Given Germany the maximal score of indepence of the central bank when all of the executive board is appointed by people who are democratically accountable seems strange when there are countries like the US where a good chunk of the seats of the executive board aren’t chosen by people who are democratically accountable.
Whether or not you let banks (shareholders) decide about who gets appointed to the executive board of a central bank or let democratically accountable people decide is a question that’s distinct from whether those people are independent from the people who appointed them once they are appointed.
The graph seems to have been made in 1993 which is 3 years after the German channlor got the president of the Bundesbank to resign because of policy differences.
If a German political party would adopt in it’s platform NGDP targeting which Eliezer Yudkowsky recommended, they could focus on appointing people to the executive board that believe in NGDP targeting.
When it comes to Democratic accountability it also feels like you ignored the Elephant in the room. Democratic accountability is not just about election but it’s also about understanding what people do to be able to criticize their decisions. Removing the power to do trillion dollar deals in the dark from burocrats lists their power but might very well make the whole system more efficient.
I am not an economist, so it’s hard to me to judge the quality of the paper. In fact, I was just trying to show the kind of argument made for bank independence at the time. Feel free to check the paper for yourself: https://debis.deu.edu.tr/userweb//yesim.kustepeli/dosyalar/alesinasummers1993.pdf Section 2. is about measuring the central bank independence.
It seems to cite among others Bade and Parkin’s Central Bank Laws and Monetary Policy from 1982.
When it discusses Italy where shareholders have the right of proposing candidates and the government needs to approve them, it judges the government as having complete control.
In Germany where the Federal government appoints some members and the Bundesrat (body of the state governments) appoint others they judge the system as a self-perpetuating oligarchy. To the extend that they are it’s because the job they are doing is valued by the ruling parties in Germany so they listen to their recommendations about who to appoint.