Central bank independence, policies and reforms: addressing political and economic linkages

Marianne Ojo

MPRA Paper from University Library of Munich, Germany

Abstract: Whilst economic, political linkages and relationships constitute the theme of this paper, the paper also attempts to address why central bank independence still lacks certain vital attributes which embody adequate governance and accountability mechanisms - which are necessary if better results in relation to longer term economic and political objectives, in particular, are to be achieved. From this perspective, the growing importance of the shift to a focus on distinguishing between micro and macro prudential regulation is illustrated. The need for such distinction is not just evidenced through the creation of agencies responsible for such affairs within particular jurisdictions which are considered in this paper, but also through the increased realisation and need for greater focus on decision making responsibilities which are to be assigned to political and economic entities at supra national levels. Financial stability, it appears, has more to do with a mere focus on longer term objectives. Financial stability is also concerned with the ability to sustain long term policy objectives whilst being flexible enough to respond effectively to short term unpredictabilities.

Keywords: inflation targeting; monetary policies; central banks; fiscal policies; accountability; governance arrangements; momentum effects (search for similar items in EconPapers)
JEL-codes: E2 E5 G2 K2 (search for similar items in EconPapers)
Date: 2014-03-07
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
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