Should central banks try to maximize employment?

Sunday social thread! Yay!

Bit of an economic question this time. Central banks issue currency and set the official cash rate, among other duties. Primarily they do this to control inflation. But should they be thinking about employment too?

Employment?

It is hard enough to influence inflation. Employment would be speculatory times 100.

Now into the greater economic theory of monetary policy. Artificially tampering in the economy decreases long term sufficiency and lowers competitiveness.

Crow: If you look at countries without central banks, inflation in the double digits is common. NZ used to average about 13-14% inflation before we introduced a central bank. Within one year that dropped to about 3% and has remained roughly there since.

admin: Ha, obvious bullshit!

Every country on earth has a central bank.

Crow: NZ didn't prior to 1992.

admin: Yeah, but that was a bullshit argument.

"If you look at countries without central banks, inflation in the double digits is common"

Every country has a central bank. This observation is made-up.

Crow: But it's true. All the data is that the institution of central banks reduces inflation by 10-20% compared to free markets. Which is a LOT.

admin: That makes NO SENSE.

Every country has a central bank . There is no comparison to be made.

You just invented a made-up observation.

Crow: So you're saying there's no economic data point you can look to where there is an inflation rate and no central bank?

admin: You said, and I quote once more,


"If you look at countries without central banks , inflation in the double digits is common"

That is a bullshit observation. Every country has a central bank today. Even Tuvalu and the Vatican.

If anything, own up to it. That's all.

Crow: Did I say countries that exist today without central banks? No. You misread me.

admin: What was I supposed to interpret when you said.

"If you look at countries without central banks."

You are obviously covering rather than admitting fault, which is pretty shallow.

Whatever though. If you are referring to a world 30 years ago (which you originally were not) , then it would be worth nothing that those countries were mostly in incredible poverty, even relative to the third world, and remain as an outlier.

Actually can you source these observations and comparisons made 30 years ago?

Crow: Sure.

Take Canada, notice stabilized growth since 1935. http://www.tradingeconomics.com/canada/inflation-cpi
Notice that Australia jumps on the same growth curve since 1960, despite earlier wild swings. http://www.tradingeconomics.com/australia/inflation-cpi

In every case in human history, the introduction of a reserve bank has had the same effect - moderating inflation to a mild growth/recession cycle, as opposed to a severe one.

admin: Take Canada, notice stabilized growth since 1935.

THAT"S your example?

Something 80 years ago during the great depression?

Monetary policy is often cited by economists as being harmful during stability, and productive during collapse.

What is does 100% of the time is create an artificial economy dependent on the artificial influence given by the central banks (and in reality, most central banks have barely any influence on interest rates)


In every case in human history, the introduction of a reserve bank has had the same effect - moderating inflation to a mild growth/recession cycle, as opposed to a severe one.

That's nonsense.

Tons of central banks have caused economic implosions or screwed over bursts of economic growth. Most ended up screwing over people during the Great Repression.

Cuba is a good example. Their attempts to regulate through their central bank caused more harm than good.

Another point to bring up, is that most central banks are primarily controlled by corporations and not the state. The Rothschilds more or less have ownership over all but three central banks.

Crow: I can't really believe I have to debunk this Rothschild conspiracy stuff again.

No, they don't. They just don't.

First, most banks are in fact nationalized, not privatized.
Second, privatized does not mean controlled by corporations.
Third, having shares in does not mean owning or controlling.
And fourth, what do you think those three countries are? I know NZ's central bank very well and can tell you without any doubt the Rothschild family has no influence on it.

admin: Before you answer, if your answer includes Iran, North Korea and Libya, can you please stop believing everything you read on Facebook?

admin: Do you think that countries need central banks?

Bi0Hazard: I think they sure help! A country won't inherently collapse without one but will be much more economically vulnerable.

admin: Then, how do you feel about the alternative of free banking(privatized bank)?
http://www.zerohedge.com/news/2013-11-12/what-would-happen-if-there-was-no-central-bank

Bi0Hazard: Exactly like that. Markets would be more volatile. You'd get big swings in inflation. Harder to enforce government policy esp. as regards to ensuring equality.