Central banks - independent or almighty?

Otmar Issing

No 92, SAFE Policy Letters from Leibniz Institute for Financial Research SAFE

Abstract: Historically Central Bank Independence (CBI) was anything but the norm. CBI seems to contradict core principles of democracy. Most economists were also against CBI. After the Great Inflation of the 1970ies many empirical studies demonstrated that there is a strong negative correlation between the degree of CBI and the rate of inflation. In 1990 most major countries had endowed their central bank with the status of independence. Overburdening with elevated expectations and additional competences are threatening the reputation of central banks and undermining the case for CBI.

Keywords: Central; banks (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-his, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:safepl:92

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