Is central bank independence under threat?
The political costs of central bank actions may lead a long-held orthodoxy to collapse
The recent re-election of convicted felon Donald Trump is less of an anomaly than you might think.
Since the COVID-19 pandemic, incumbents in western democracies have lost 40 out of 54 elections. These losses have occurred irrespective of tenure or whether the incumbent was on the left or right on the political spectrum. This trend may in part explain The Donald’s return to power.
Of course, local political pundits will highlight unique features that they say really explain these 54 defeats. Many of them, no doubt, were long overdue. Some of the incumbent governments were also presumably corrupt or incompetent.
But a global phenomenon must be explained by global factors.