The Coalition’s Economic Policy of Fiscal Austerity and Monetary Experimentation by the Bank of England

Sowels, Nicholas

doi:10.4000/osb.1641

Cited by 3 publications

(1 citation statement)

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“…40 Later, when the Conservative-led coalition government took over in 2010, predeflationary economic conditions meant that the Bank of England's inflation target required expansionary policy; this allowed the Tories to implement their preference for austerity secure in the knowledge that the central bank would mitigate some of the economic impact. 41 Given low world interest rates that reduce the prospective borrowing cost consequences of a reversal of CBI, and Labour's ambition to reverse austerity, resubordination of the Bank of England to the Treasury is a real prospect should the party return to power. In the UK general election of 2015, Labour Party leader Jeremy Corbyn proposed "QE for the People," which would have involved using central bank monetary issue to fund an investment bank.…”

Section: Prospects For Democratizing Central Bankingmentioning

confidence: 99%

To Democratize Finance, Democratize Central Banking

Woodruff

2019

Politics & Society

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Robert C. Hockett’s “franchise view” argues, convincingly, that the capacity of banks or quasi-bank financial entities to create money rests on the laws, regulations, and guarantees of the state under which they operate. Fred Block advocates the use of this insight as a beachhead for establishing the legitimacy of locally embedded, nonprofit lenders whose investments would be dedicated to public purposes. However, given the pervasive influence of “everyday libertarianism,” which fosters blindness to the public character of private economic power, this commentary warns of possible counterproductive consequences of this proposal unless it is fused to the democratization of central banking. An end to central bank independence would highlight the ineliminable role of the state in the market and make that role easier to reshape. It would also end the dynamic whereby monetary easing provides political cover for damaging fiscal austerity and thus lead to better democratic deliberation on the contours of policy.

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Section: Prospects For Democratizing Central Bankingmentioning

confidence: 99%