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Eduardo Zambrano
''A structuralist theory of central bank independence''
( 2014, Vol. 34 No.4 )
Can a heterodox economist find arguments in favor of Central Bank independence? Economists currently favor arguments in favor of Central Bank independence based on Barro-Gordon (1983 a,b), a very ‘orthodox' model. Consequently, those who view the economic orthodoxy with suspicion tend to question Central Bank independence. I argue that Central Bank independence can be beneficial even in a very ‘structuralist' economy: one in which workers are unionized, firms are cartelized and inflation arises as the result of distributive struggles among capitalists and workers. This is so because it is the time-inconsistency issue, and not the structure of the economy, that which generates the inflation bias that Central Bank independence is set to eliminate.
Keywords: Central Bank Independence, Inflation Bias, Structuralist Theories of Inflation, Distributive Struggles.
JEL: E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit: General
B5 - Current Heterodox Approaches: General
Manuscript Received : Sep 14 2014 Manuscript Accepted : Oct 24 2014

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