Trump thank you tour Mark Makela/Getty Images

The Coming Short-Termism

Donald Trump could bring more short-term thinking to economic policymaking in the US 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.

WASHINGTON, DC – The inauguration of Donald Trump as US president on January 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% 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.

In 2001, inflation was going to be near 65%, and the International Monetary Fund wanted Turkey to commit to a 20% target for the following year. Instead, we committed to a 35% target, and surpassed that by bringing inflation down to 30% in 2002.

To continue reading, please log in or enter your email address.

To continue reading, please log in or register now. After entering your email, you'll have access to two free articles every month. For unlimited access to Project Syndicate, subscribe now.

required

By proceeding, you are agreeing to our Terms and Conditions.

Log in

http://prosyn.org/uFzfTU6;

Cookies and Privacy

We use cookies to improve your experience on our website. To find out more, read our updated cookie policy and privacy policy.