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Has independence had its day? The crisis facing central banks

Italian economist Lucrezia Reichlin says the more the ECB is pushed to expand its policy remit, the more likely it is to trigger destabilising political conflicts

Is anybody out there? The ECB's pleas for fiscal stimulus have fallen on deaf ears
Is anybody out there? The ECB's pleas for fiscal stimulus have fallen on deaf ears Photo: Getty Images

The relationship between monetary authorities and governments differs in important ways between the US and the eurozone.

The US invariably falls into a traditional pattern whereby governing politicians, with an eye toward the electoral cycle, tend to favour expansionary fiscal policies and looser monetary conditions, while the Federal Reserve, wary of political pressure, endeavours to assert its independence.

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