DeLong: The ECB’s Battle against Central Banking

Brad DeLong tells the ECB to start acting like a central bank:

The ECB’s Battle against Central Banking, by Brad DeLong, Commentary, Project Syndicate: ...The ECB continues to believe that financial stability is not part of its core business. As its outgoing president, Jean-Claude Trichet, put it, the ECB has “only one needle on [its] compass, and that is inflation.” ...

Perhaps the most astonishing thing about the ECB’s monochromatic price-stability mission and utter disregard for financial stability – much less for the welfare of the workers and businesses that make up the economy – is its radical departure from the central-banking tradition. ...