On August 7, David Bholat suggested that it was ‘Time to pay policy-makers based on their performance’. Like all good economists, Bholat has been keen to adjust incentives so that those involved are encouraged to perform better, in this case the senior members of the monetary policy committee (MPC). While his intention was good, I think his target was misdirected, and could be improved.

What went wrong, in my view, was not that central bank governors and other MPC members had the wrong