Populism, Financial Inequality and Central Bank Independence: A Political Economics Approach
23 Pages Posted: 5 Apr 2018 Last revised: 3 Aug 2018
Date Written: April 1, 2018
This paper examines myopic, populist policies that guarantee short-term financial protection of the people from the elite without regard for long-term fiscal or monetary distortions. Assuming that citizens are financially heterogeneous, this paper shows that inefficient outcomes can arise when the majority of citizens are bank stakeholders. Populist policies promote politically controlled central banks.
Keywords: Populism, central bank independence, monetary policy, banking policy, political economy
JEL Classification: D72, D78, E31, E52, E58, E62
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