“Central bankers need to profess a lot more humility today. Not because things went wrong in the last few years but because they took too much credit for what went right before.” Great talk by @AdamPosen.
Reminder: tomorrow morning at 9.30, the #BVerfG will publish its decision on the legality of the #Mietendeckel, a policy that froze rents for over 1.5 million apartments in Berlin since February 2020, on its website 🧨
The #BVerfG declared the Berlin rent cap "null and void".
As expected, the main argumentation of the #BVerfG concerns the question of Länder competence. #Mietendeckel
@mh0rvath responds by arguing that the fact that central banks actions have wider effects is often benign or even positive. Moreover, there is nothing progressive in dismantling CBI (mentioning Hungary as an example)
@mh0rvath's argument that central banks evolved into focusing on price stability because "that is what they are good at doing" is a very simplified view on the various conflicts related to the historical emergence of CBI and the price stability mandate (tbf he only had 5 minutes)
Some commentators of today's #BVerfG decision argue that it shows an #ordoliberal bias. Here are some first thoughts about this 1/
From a certain perspective, the #BVerfG decision ticks some key ordoliberal boxes: a) purporting to maintain a constitutional order that limits discretionary economic policy; 2/
b) advising the ECB to remain within its mandate, i.e. a rules-based approach; c) by forcing the ECB to consider the wider economic effects of #PPSP, it is signalling concern about potential “market-distorting” consequences 3/