Even if we believed that central bankers are purely selfish, and don’t care at all about the mandate they have nominally taken on, they still have some incentive to produce higher employment (inflation being equal). Politicians encourage them to do so, and they get prestige among macroeconomists (e.g. “wow FED chairperson X presided over the longest period of peacetime growth since 1900.”). To paraphrase evolution-is-just-a-theorem: what incentive do central bankers have not to puruse adequately loose monteray policy?
Even if we believed that central bankers are purely selfish, and don’t care at all about the mandate they have nominally taken on, they still have some incentive to produce higher employment (inflation being equal). Politicians encourage them to do so, and they get prestige among macroeconomists (e.g. “wow FED chairperson X presided over the longest period of peacetime growth since 1900.”). To paraphrase evolution-is-just-a-theorem: what incentive do central bankers have not to puruse adequately loose monteray policy?