Bank of Canada Independence Vs. Accountability
The origin of the concept of central bank independence is a critique of social democratic ideas prevalent during the middle part of Friedman’s career.
The origin of the concept of central bank independence is a critique of social democratic ideas prevalent during the middle part of Friedman’s career.
Ordinary Canadians will certainly feel the heat from the price of housing when monetary policy adds fuel to the fire while their pay cheques freeze.
We can hardly tackle obscene and rising levels of economic inequality if we are not prepared to see a sustained rise in wages at the expense of the capital share of national income, and a sustained period of wages growing at least in line with growing productivity.
The next financial crisis is coming, sooner more likely than later. And Canada has no reason to be complacent, given its own vulnerabilities.
While most economists accept that there is some trade-off between unemployment and inflation, no one really knows how low unemployment can fall before wages begin to rise at a faster pace.
Turner is clear that any move in this direction should be undertaken by central banks, not by governments seizing control of the printing press, and is certainly aware of the risk of inflation if directly financed deficits get out of hand.