The central banker’s new clothes

Robert Skidelsky  |  May 20, 2021

By Robert Skidelsky, includes “… The bottom line is that for money to affect the economy in a predictable way, it must be spent in a predictable way. And that can happen only if the spender is the government. The effectiveness of monetary policy thus depends on the central bank being the agent of the Treasury. But no one can admit this, because the Treasury is wicked, and the central bank is virtuous. So, the official language of macroeconomic policy remains monetary policy. Any correlation with fiscal policy is of course purely coincidental.”

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