Central banks should allow governments to fail: Kocherlakota
Central banks that intervene to avoid the insolvency of a fiscal authority are relinquishing control over price stability, Narayana Kocherlakota, the president of the Minneapolis Federal Reserve, said on Monday.
At the Sovereign Debt Seminar CME Group-MSRI Prize in Innovative Quantitative Applications in Chicago, Illinois, Kocherlakota said: "Even if the fiscal authority borrows exclusively in its country's own currency, the central bank can have a large amount of control over the price level
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