Spring 2021
Reassessing Central Bank Independence

Reassessing Central Bank Independence

Ulises y las Sirenas by Waterhouse- National Gallery of Victoria Melbourne 1891
Ulysses and the Sirens. John William Waterhouse. 1891.

Prompt for Discussion

Contributors: Paul Tucker, Rosa Lastra, Christina Parajon Skinner, Gerald Epstein, Robert Hockett, Nathan Tankus, Raul Carrillo, Stefan Eich, Dan Rohde and Lev Menand

For much of the past century, central banks have been considered independent establishments within government: subordinate to the core governing institutions—such as legislatures and courts—but insulated from day-to-day influence and ordinary oversight. This generally entails administrative independence, budgetary autonomy, tenure in office, and little to no judicial review of monetary policy actions. A longstanding consensus among economists and legal scholars alike has justified this arrangement, emphasizing that elected officials must be restrained from pursuing excessively expansionary monetary policies to the detriment of the longer-term health of the economy.

But the legitimacy of Central Bank Independence (“CBI”) is now under pressure. Recent interventions by Adam Tooze and others have challenged the idea that there is a social consensus around the core role of central banks, and, to the extent there is, that central banks have ever been particularly good at charting policy consistent with that consensus. The record of the last forty years suggests a persistent disinflationary bias on the part of central bank policy makers, and possibly a tie between central bank independence and increased inequality. Central banks have also repeatedly rolled back oversight of financial institutions and adopted policies that have bolstered their returns. In 2008, central banks presided over a monetary contraction reminiscent of the 1930s. Would more politically accountable central banks have been better for most people, even if they delivered more inflation and smaller, less liquid financial markets?

Paul Tucker offers a carefully reasoned defense of CBI in his recent book Unelected Power. But, even as Tucker himself points out, CBI is consistent with democratic self-government only in narrow circumstances: where there is a social consensus around the tradeoffs between monetary expansion and other macroeconomic variables like unemployment, and where central banks confine themselves to implementing that consensus.

At the same time, central banks have begun pursuing policy initiatives less connected to monetary stability. Calls are growing for central bankers to address social emergencies from climate change to racial inequity (by buying mortgage debt in low-income communities, assembling a portfolio of “green” bonds, adopting “green risk weights” for assessing bank balance sheets, e.g.). Can institutions engaged in such work be justifiably insulated from ongoing political oversight?

This roundtable will explore these questions, and consider the history, theory, practice, and future of CBI. What does independence mean for a central bank, and who, exactly, does it insulate the bank from? Are independent central banks still desirable? Were they ever? If not, what should their status be? What role (if any) should private forces play in central bank governance? What about finance ministries? Chief executives? Legislatures, courts, and other governing institutions? And how, if at all, does a central bank’s mandate factor in?


August 17, 2021
Democratic Money: Central Bank Independence vs. Contested Control (Part 2)
Gerald Epstein, University of Massachusetts Amherst

August 10, 2021
Democratic Money: Central Bank Independence vs. Contested Control (Part 1)
Gerald Epstein, University of Massachusetts Amherst

August 3, 2021
Central Bank Independence & Commercial Bank Independence: Are We Asking the Right Questions?
Dan Rohde, Harvard Law School

July 20, 2021
Independence from What?
Stefan Eich, Georgetown University

July 14, 2021
Two Blades, One Scissors: Central Bank Independence with (Some) Central Bank Allocation
Robert Hockett, Cornell Law School

July 6, 2021
Boots on the Rails: The National Security State, Racial Subordination, & the Myth of “Instrument Independence”
Raul Carrillo, LPE Project and Yale Law School

May 29, 2021
Independence:  Executive Pressure and Central Bank Activism
Christina Parajon Skinner, University of Pennsylvania – The Wharton School



Nobody Really Knows How the Economy Works. A Fed Paper Is the Latest Sign.

Oct. 1, 2021

It has long been a central tenet of mainstream economic theory that public fears of inflation tend to be self-fulfilling.

Now though, a cheeky and even gleeful takedown of this idea has emerged from an unlikely source, a senior adviser at the Federal Reserve named Jeremy B. Rudd. His 27-page paper, published as part of the Fed’s Finance and Economics Discussion Series, has become what passes for a viral sensation among economists.

See full NYT article.

Destin Jenkins, Co-Editor

Destin Jenkins is the Neubauer Family Assistant Professor of History at the University of Chicago. He specializes in racial capitalism’s history and consequences for democracy and inequality in the United States. He earned his undergraduate degree from Columbia University (2010), and doctorate from Stanford University (2016). He has held fellowships at the Charles Warren Center for Studies in American History at Harvard University, and the Robert L. Heilbroner Center for Capitalism Studies at The New School.

Destin Jenkins is the author of The Bonds of Inequality: Debt and the Making of the American City (The University of Chicago Press). Indebtedness, like inequality, has become a ubiquitous condition in the United States. Yet few have probed American cities’ dependence on municipal debt or how the terms of municipal finance structure racial privileges, entrench spatial neglect, elide democratic input, and distribute wealth and power. In The Bonds of Inequality, Jenkins shows in vivid detail how, beyond the borrowing decisions of American cities and beneath their quotidian infrastructure, there lurks a world of politics and finance that is rarely seen, let alone understood. Focusing on San Francisco, The Bonds of Inequality offers a singular view of the postwar city, one where the dynamics that drove its creation encompassed not only local politicians but also banks, credit rating firms, insurance companies, and the national municipal bond market. Moving between the local and the national, The Bonds of Inequality uncovers how racial inequalities in San Francisco were intrinsically tied to municipal finance arrangements and how these arrangements were central in determining the distribution of resources in the city. By homing in on financing and its imperatives, Jenkins boldly rewrites the history of modern American cities, revealing the hidden strings that bind debt and power, race and inequity, democracy and capitalism.

He is also co-editor of Histories of Racial Capitalism (New York: Columbia University Press, 2021). Although Cedric J. Robinson popularized the term, racial capitalism has remained undertheorized for nearly four decades. Histories of Racial Capitalism brings together for the first time distinguished and rising scholars to consider the utility of the concept across historical settings. These scholars offer dynamic accounts of the relationship between social relations of exploitation and the racial terms through which they were organized, justified, and contested. Deploying an eclectic array of methods, their works range from indigenous mortgage foreclosures to the legacies of Atlantic-world maroons, from imperial expansion in the continental United States and beyond to the racial politics of municipal debt in the New South, from the ethical complexities of Latinx banking to the postcolonial dilemmas of extraction in the Caribbean. Throughout, the contributors consider and challenge how some claims about the history and nature of capitalism are universalized while others remain marginalized. By theorizing and testing the concept of racial capitalism in different historical circumstances, this book shows its analytical and political power for today’s scholars and activists.

His writings have appeared in The Washington Post, The Nation, Just MoneyPublic Book, among other outlets.

Jenkins teaches on the history of racial capitalism, urban history, African American history, comparative race and ethnicity, and mass incarceration.

His research interests include twentieth-century United States, African American history, urban studies, race and inequality, and the history of capitalism.



Hannah Hubbard, Assistant Editor

Hannah Hubbard

Hannah is a J.D. candidate at Harvard Law School. She is involved in the Consumer Protection Law Students Association, Street Justice Coalition, and Lambda. She has interned at the Committee for Public Counsel Services in Roxbury and the National Consumer Law Center in Boston. Hannah is also an Editor for Unbound: Harvard Journal of the Legal Left and an Article and Executive Content Editor for the Harvard Journal of Law & Gender.

Hannah’s interests include consumer protection, the history of U.S. capitalism, and critical legal theory. When she graduates, Hannah wants to return to her home state of North Carolina and practice consumer law.

Hannah has a B.A. in Economics (with a minor in History) from Wellesley College.