Associate Professor Shireen Morris has long been concerned about the power of unelected central bankers. She has always questioned their supposed neutrality. In his brilliant paper on Central Banks (link below), she suggests that, “Theories of ‘monetary policy neutrality’ have facilitated inaction and atrophy of the Government’s power over monetary policy.\"
Her research instinct came back online when the Australian Government in 2024 proposed removing Parliament’s veto over the Central Bank. Should we really have one of the most important institutions completely outside of democratic control?
In this brilliant conversation, we take a step back to question the role of all central banks properly. Why do they all have a mandate on price stability? Can they control inflation? Why and how have they gained so much power and influence over our economy and society? We also consider where independence starts and ends.
Finally, we take a step into the future. Using an independent Scotland as a test case, how would William and Shireen co-design a brand new Scottish Central Bank?
Link to Shireen's paper:
Against Increased Central Bank Independence in Australia: Better Balancing the Unelected Authority to Decide Big Distributional Trade-offs with Principles of Constitutional Democracy
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5083556
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