Selected Central Banks and Alternative Analytical Systems
In the perspective of a London School of Economics (LSE) professor, most economists tend to ground themselves in something. I review some cases, recall alternatives, reconsider the hypotheses from Section 3. 1b, and consider the matter of a super-central bank and a super-national money for the member states of the European Monetary System. Although I am not indifferent about the outcomes for the EMS, the super-central bank and super-national money matters provide the opportunity for a rather practical exercise. It is namely, given the background in the alternatives analyses, their historical roots, and links to political positions, along what lines might I proceed in structuring and provisioning a new central bank (as to power, policy instruments, and accounting control arrangements). Further, in considering the matters of economic, political, and monetary union for such a diversity of European states, other facets of economics arise, notably, the efforts through the early 1990s at economic union suggest that economic union falls short without monetary union and that monetary union calls for political union. Parallel to these suggestions are others for economics as empirical science: whether the economics of the real goods sector can be readily separated from that of the monetary sector and whether theoretic economics in fact has political dimensions of the sort introduced here.
The alternatives--with links to actual-policy orientations--are the Keynesian one (also with a post-Keynesian flair) and the Friedman system I offer. In the first, there is skepticism about money (the i-orientation, the liquidity trap,