Former US Treasury Secretary Larry Summers on Friday, 31, criticized rulers who attack the independence of central banks in their countries. According to him, hitting these institutions that try to reduce interest rates is a “fool’s game”. The statement was made during the 9th Brazil Conference, which takes place at Harvard University and the Massachusetts Institute of Technology (MIT), to date. Organized by the Brazilian student community of Boston, the event is in partnership with Stadiumwhich covers and transmits the panels.
Summers participated in the debate on the challenges for economic development in Latin America. The American said that the success of an economy is measured by its ability to avoid sharp changes in consumer prices. “The best way we have found to keep prices stable, and which are a sort of anchor, are independent central banks and their ways of working, capable of isolating themselves,” said the former US secretary. “Banks don’t listen, so you can’t lower interest rates, but the market listens.”
The economist’s speeches took place in the midst of attacks by President Luiz Inácio Lula da Silva and members of the government and the PT against the independence of the Brazilian central bank and the interest rates practiced in the country. The former secretary did not directly mention the administration of the PT.
Democracy
Summers also drew a parallel between the coups in Brasilia on January 8 and the Capitolio in the United States, highlighting the challenges to democracy. “I don’t think it takes a lot of social science imagination to see important parallels between what’s happening in my country and what’s happening in yours.”
The former secretary drew attention to the scenario of high inflation affecting Latin America, of which Brazil is the largest economy, and global concerns such as climate change and geopolitical risks. “There is the flow of concern about inflation and the challenge of restoring price stability, which is somewhat perennial in Latin America.” And he underlined the importance of Brazil’s performance. “Brazil assumes great importance as the largest and most influential nation in the region,” she said.
At the same event, Inter-American Development Bank (IDB) President Ilan Goldfajn said that fiscal restrictions are important for controlling inflation post-pandemic, but reflected that they make it difficult to provide social benefits to the population. , such as improving health care and education.
“The government does not have the resources to meet these demands that society is asking, and it is running out of patience to ask, because the resources it normally has are limited and the region faces fiscal restrictions,” said the former Bank president central. “Central banks are reacting to high inflation and, therefore, we have the highest interest rates in the world today.”
The information comes from the newspaper The State of São Paulo.
Source: Terra
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