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Central Banks Debate | Munk Debates

April 25, 2023

Central Banks Debate

Be it resolved, central banks have not adequately represented the public interest.

Guests
Thomas Palley
Steve Kamin
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About this episode

Just when inflation seemed to finally be cooling, high interest rates claimed their first major victim: Silicon Valley Bank. And yet, central banks around the world claim the job is not finished, and more needs to be done to curb runaway inflation. But for some economists and business insiders, the latest debacle confirms a long-held belief that central banks have largely failed as public institutions. Their supposed neutrality is a farce, and they are inherently political bodies run by unelected officials. Democracy requires more than accountability, transparency, and good deliberation. It requires democratic power: the power of the people and their elected officials to steer policy. They argue central banks are in desperate need of transformation to better serve the economy and the public. But others argue that the central bank has largely succeeded at seeing the global economy through turbulent times over many decades. The fact that central bankers play an important role in society, but are unelected, does not mean that central banks by their very nature are inherently democratic. And while some minor reforms may be warranted, central banks have been and remain one of the most resilient and effective public bodies.

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Guests

Thomas Palley

“Central banks are essentially run by Mr. and Mrs. Wall Street.”

Thomas Palley

“Central banks are essentially run by Mr. and Mrs. Wall Street.”

Dr. Thomas Palley is an economist living in Washington DC. He holds a B.A. degree from Oxford University, and a M.A. degree in International Relations and Ph.D. in Economics, both from Yale University. He has published in numerous academic journals, and written for The Atlantic Monthly, American Prospect and Nation magazines.

Dr . Palley was formerly Chief Economist with the US-China Economic and Security Review Commission. Prior to joining the Commission he was Director of the Open Society Institute’s Globalization Reform Project, and before that he was Assistant Director of Public Policy at the AFL-CIO.

Steve Kamin

“Interests at the Central Bank have been very much, and not only promoting economic stability, but increasing opportunity for a lot of folks."

Steve Kamin

“Interests at the Central Bank have been very much, and not only promoting economic stability, but increasing opportunity for a lot of folks."

Senior fellow at the American Enterprise Institute (AEI), where he studies international macroeconomic and financial issues.

Before joining AEI, Dr. Kamin was the director of the Division of International Finance at the Federal Reserve Board, where he guided the direction of economic research and the formulation of the staff’s global economic forecast, which he presented to the Federal Open Market Committee. Dr. Kamin was a principal adviser on international economic and financial policy matters to the Federal Reserve’s chair and other board members. He represented the Fed before international groups such as the G7, the G20, and the Bank for International Settlements (BIS) Committee on the Global Financial System.

In addition to holding a range of other positions during his 32 years at the Fed, Dr. Kamin served as a visiting economist at the BIS, a senior economist at the White House Council of Economic Advisers, and a consultant for the World Bank. His writings on international macroeconomics and finance have been published widely, including in International Finance, Journal of Development Economics, Journal of International Money and Finance, Journal of Money, Credit and Banking, Journal of Policy Modeling, and Review of International Economics.

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