My good friend Praveen Chakravarty drew my attention to this article in Wall Street Journal. It is on how the cherished, coveted and touted independence of central banking from the Executive is now coming in the way of rejuvenating economic growth.
This is my reaction:
Understanding and accepting the fact that there are limits to economic growth as it has been driven by an unprecedented accumulation of debt in peacetime continues to elude governments, central bankers and their cheerleaders. It is the common underpinning for all these discussions, as in the WSJ article above. The underlying purpose is to defy natural speed limits to sustainable long-term economic growth in the short-term and to ignore long-term consequences, as they have been doing for the last thirty years.
To appreciate the above paragraph, pl. follow this link and check out the article I posted last night there.
My column in MINT today is also related.
Finally, although his tone may be shrill, David Stockman makes many well argued points as to why the end of central banking – as we have come to know it in the last several decades might well be nigh.