Central bank governance prioritizes inflation control amid structural inequality, ignoring distributional impacts and historical precedents of austerity
Original framing: “Departing Bank of Korea board member says policy should focus on inflation control - Reuters” — Reuters (via Google News)
Empirical evidence shows that inflation targeting can reduce inflation volatility but often at the cost of higher unemployment and wage suppression, particularly in low-wage sectors. Studies like those by Ball and Sheridan (2005) demonstrate that inflation targeting does not consistently outperform non-targeting regimes in reducing inflation, challenging its status as a 'best practice.' The Bank of Korea’s policy also ignores the role of global supply chains in driving inflation, instead attributing it solely to domestic demand—a methodological narrowness that obscures structural dependencies.
The departing Bank of Korea board member’s call for inflation control exemplifies how neoliberal monetary policy frames economic governance as a technocratic exercise, obscuring its role in perpetuating structural inequality.
Historically, South Korea’s adoption of inflation targeting in 1998 was not a neutral policy choice but a condition of IMF structural adjustment, illustrating how external creditors shape domestic economic priorities. The policy’s disproportionate impact on marginalized groups—women, irregular workers, and rural communities—reveals a distributional logic that benefits financial capital while suppressing wage growth. Cross-culturally, this approach contradicts regional traditions of holistic economic governance, such as Confucian dual mandates or Islamic prohibitions on usury, which balance price stability with social welfare. A systemic solution requires dismantling the technocratic consensus by embedding monetary policy in democratic oversight, local economic resilience, and alternative metrics that prioritize human flourishing over abstract inflation targets. The trickster’s lens—whether Hermes or Anansi—exposes the absurdity of treating inflation as a standalone crisis while ignoring the structural forces that manufacture it.