What is the relation between monetary policy and inequalities in income and wealth? This question has received insufficient attention, especially in light of the unconventional policies introduced since the 2008 financial crisis. The article analyzes three ways in which the concern central banks show for inequalities in their official statements remains incomplete and underdeveloped. First, central banks tend to care about inequality for instrumental reasons only. When they do assign intrinsic value to containing inequalities, they shy away from trade-offs with the standard objectives of monetary policy that such a position entails. Second, central banks play down the causal impact monetary policy has on inequalities. When they do acknowledge it, they defend their actions by claiming that it is an unintended side effect, that it is temporary, and/or that any alternative policy would fare even worse. The article appeals to the doctrine of double effect to criticize these arguments. Third, even if one accepts that inequalities should be contained and that today’s monetary policies exacerbate them, is it both desirable and feasible to make containing inequalities part of the mandate of central banks? The article analyzes and rejects three attempts on the part of central banks to answer this question negatively.
Monetary policy operations in corporate security markets confront central banks with choices that are traditionally perceived to be the prerogative of governments. This article investigates how central bankers legitimise corporate security purchases through a comparative study of the European Central Bank (ECB) and the Swiss National Bank (SNB). As we show, central bankers downplay the novelty of corporate security purchases by relying on familiar pre-crisis justifications of Central Bank Independence. Citing an ideal of 'market neutrality', central banks present corporate security purchases as pursuing a narrow objective of price stability and obfuscate their distributive consequences. In this way, central bankers depoliticise corporate security purchases: they reduce the potential for choice, collective agency, and deliberation concerning both the pursuit of corporate security purchases and the choices made in implementing these policies. We also describe the undesirable democratic, social and environmental dimensions of these practices, which we propose to address through enhanced democratic accountability.
In this article, I examine the bias in favour of financial markets displayed by the European Central Bank (ECB) during the Eurozone crisis. Having analysed the roots of the ECB's bias, I explore the discrepancy between the conditionality of ECB financial support that is directed towards states and that which is directed towards markets. On the one hand, the ECB has exerted strong coercive and cognitive pressures to reform Eurozone economic governance in a market-friendly way. On the other hand, it has employed monetary measures to save large Eurozone banks from a complete meltdown without controlling how these banks use their provided liquidities. I conclude by stressing the democratic problems engendered by the ECB's bias.1 The CBI template prescribes that the objectives of central banks should be limited to price stability. To achieve this goal, central banks should be protected from political interference. According to the New Classical Economics literature, without such protections, central banks would not be credible in the eyes of market operators in their commitment to maintaining price stability (Kydland and Prescott 1977;Rogoff, 1985).
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