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The cat and the fish – the complicated relationship between governments and central banks

The concept of central bank independence and tensions between fiscal policy and monetary policy are explored in a book by former Federal Reserve vice-chair Alan Blinder.

Fiscal policies can be tailored to favour the rich or the poor, and US history holds examples of each. PHOTO: AFP
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When writing his new book, Princeton University economics professor and former US Federal Reserve vice-chair Alan Blinder was asked repeatedly by publishers: What was his punchline? Did he have a 90-second elevator pitch?

As the work progressed, the answer became obvious: There was no convenient capsule summary of over half a century of monetary and fiscal history.

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