Can Anybody Tell Me What Bennett McCallum Means Here?
Economist Debates: Inflation: Statements: an increase in the target inflation rate would tend to undermine the rationale for central bank independence. Furthermore, it would constitute an additional movement away from recognition of the economic necessity for intertemporal discipline. Indeed, legislators could take an increase in the inflation rate expected over the future as a signal that their society is not willing to embark on serious budget-cutting fiscal reforms...
What does an increase in the target inflation rate from 2%/year to 4%/year possibly have to do with the rationale for central bank independence? How is a different inflation trend a thing that undermines the recognition of economic necessity? Why would a different inflation trend affect the willingness of a government--like the Clinton government I worked for--to try to balance revenues and spending, as compared with the unwillingness to do so of the Reagan and Bush governments that are much closer to McCallum's heart than the Clinton government was?
I genuinely do not understand.