Trump risks throwing the baby out with the bathwater

Washington

THE inauguration of Donald Trump as US president on Jan 20 could bring more short-term thinking to economic policymaking in the United States and around the world. If it does, we can expect to see increased tension between official measures and long-term goals, especially for monetary policy, development and trade.

With respect to monetary policy, I am reminded of when I became Turkey's minister of economic affairs after the February 2001 financial crash. At that time, one of my first priorities was to bring medium-term inflation down to single digits from the 30-70 per cent range that had prevailed during the previous decade. With great difficulty, we passed a law granting the Central Bank of Turkey independent control over the instruments of monetary policy; the government and the central bank would jointly set the inflation target, which I consider to be the proper arrangement.