Twenty years on: Is there still a case for Bank of England independence?

Balls, Ed, Stansbury, Anna, (2017), “Twenty years on: Is there still a case for Bank of England independence?”, Vox Eu, 1 Μαίου

Twenty years ago on 6 May 1997, the Bank of England was made independent by the new Labour government. Alongside the world’s other major central banks, this independence was until recently unchallenged (and unchallengeable): a central pillar of the global consensus on macroeconomic stabilisation. But since the financial crisis, the world has changed. The Great Recession showed that even with unprecedented quantitative easing and near-zero interest rates, central banks alone cannot always stabilise both inflation and output. The financial crisis led to central banks accumulating vast new powers,¹ which has been argued both to threaten their independence (Sims 2016, Plosser 2016, Taylor 2016, de Haan and Eijffinger 2017), and to make them over-powerful and unaccountable (Buiter 2016, Fels 2016, Issing 2011). Leading politicians have criticised the Bank of England, Federal Reserve and ECB.

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• Subacchi, Paola, (2017), “Economic Crises and the Crisis of Economics”, Project Syndicate, 13 Ιανουαρίου
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