Re:IMF: Largest driver of EU inflation is corporate profits
by revelio on Tuesday June 27, 2023 @04:11AM
(#36490220)
In practice central bankers are unelected politicians. Their mandates are set by politicians, they aren't actually bankers in the normal sense of the term, and what they do is attempt to plan the economy in service of politically set goals. If central bankers were really independent of politics then they would of course have refused to print any money to fund COVID measures like lockdowns on the grounds that they are responsible solely for inflation and employment, so if governments wanted to do that they'd have to pass emergency taxes. Obviously no central banker said that. They were all immediately on board with letting politicians do whatever they wanted.
Re:IMF: Largest driver of EU inflation is corporate profits
by nabla9 on Wednesday June 28, 2023 @11:44AM
(#36508175)
> Their mandates are set by politicians.
You say as it's a bad thing. The mandate is public and set by politicians selected by people.
This "it's all bad" because politics stuff is jut nihilism.
Central Banks are generally tasked with setting one single, but very powerful, variable: interest rates. There's thought to be a pretty strong causal relationship between interest rates and unemployment.
The central bank absolutely knows that jacking up interest rates will, in the short term, drive down living standards. The trade-off is that it will also drive down inflation, which causes much bigger drops in living standards in the long term.
... Or so the theory goes.