Monetary Policy and Democracy

According to Dr Leah Rose Ely Downey, the power to create money is foundational to the state. In the United States, that power has been largely delegated to private banks governed by an independent central bank. Putting monetary policy in the hands of a set of insulated, non-elected experts has fuelled the popular rejection of expertise, as well as a widespread dissatisfaction with democratically elected officials. In her address to the IIEA, Dr Downey makes a principled case against central bank independence (CBI) by  challenging both the economic theory behind it and developing a democratic rationale for sustaining the power of the legislature to determine who can create money, and on what terms. She discusses how states governing money creation has an impact on the capacity of the people and their elected officials to steer policy over time and argues that in a healthy democracy, the balance of power over money creation matters. About the Speaker: Dr Leah Rose Ely Downey is a Junior Research Fellow at St. John's College, Cambridge affiliated with the Department of Politics and International Studies (POLIS). Dr Downey is a political theorist with interests in the politics of economic theory, economic policymaking, and the administrative state. Her current research focuses on the democratic politics of monetary policy. Dr Downey is also the author of Our Money: Monetary Policy as if Democracy Matters. In September 2025, she will join the Department of Political Economy at King's College London.