Monetary policies demand a long-term view that is not compatible with the political cycles.
Politicians are short-sighted because they want to win the next elections.
Before elections, they would implement expansionary policies in order to reduce unemployment but those policies increase inflation.
After the election, they would fight unemployment through contractionary policies but those policies lead to high interest rate and unemployment rise.
Politicians are short-sighted whereas the independent central banks are long-sighted.
Moreover, the independence of the central banks prevents government from financing the deficit through expansionary policies.
Lastly, some people argue that monetary policy is too technical and complicated for politicians and citizens who are not educated on.
That is why only technocrats are believed to be qualified enough to develop monetary policies.
Besides, as the central bank is not elected, it can implement unpopular policies if it is in the interest of the citizens.
November 2015
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