The Shots Heard Round the World: Why conservative economists are aghast at radical reforms by Argentina’s central bank.

Rick Rowden • • July 3, 2012

At a time when most governments seem incapable of doing anything about unemployment, worsening economic inequality, and continuing financial instability, Argentina has adopted a set of striking new reforms that will enable its central bank to play a much more proactive role in addressing all of these problems. In fact, the reforms, adopted in March, may be the first shots fired in a quiet revolution in monetary policy. If successful, they could threaten to overturn 25 years of conservative central bank policies that have long been considered best practice by the IMF and central banks around the world.

Argentina’s new central bank president, Mercedes Marcó del Pont, said the reforms challenge the conservative axiom that central banks should play a very limited role in the economy. The bank is now rediscovering its sovereign capacity to formulate and implement economic policy, she explained, adding that some of the portraits on the bank’s hall of fame would be coming down — “beginning with Milton Friedman’s.”

Read the complete article here.

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One Response

  1. Hi there, thank you for sharing this very heartening news! However the article itself is not very straightforward in how it explains what this really means. While i’m sure in the finance community it is probably a radical article, lol. for the average person it is murky and they may be asking “what does this mean?” or “so what?”

    Many readers of Public Banking will realize that this is an incredibly ballsy move by Argentina’s government, a challenge to the international banking cartel and a proclamation that they will use their money to enrich their own country rather than a small select international club and their own pockets (in return for keeping their country in service and debt-enslaved to this global elite.)

    Is there a way Ellen or someone who understands this stuff could write an analysis of what this really means, how important and revolutionary and encouraging it is? An analysis from Public Banking would be really helpful and appreciated here.

    Thanks so much!

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