The Political Benefits of ‘Unconventional’ Monetary Policies in Times of Crisis

Abstract

Since the global financial crisis burst in 2008, central bankers have been at centre stage in addressing its negative consequences across the economic systems of many countries. This has been further noticed in the aftermath of the pandemic crisis that erupted at the beginning of 2020 at global level, when a number of governments did intervene also in a rather ‘unconventional’ way to support economic activity through public spending. In both circumstances, central bankers have been in a position to satisfy private interests of the relevant stakeholders even though this has been affecting both income and wealth distribution against the common good. This paper investigates the political benefits that these ‘unconventional’ policy interventions have elicited in advanced economies to point out the political and distributional consequences of them, suggesting an alternative monetary policy stance that considers climate-related issues.