Traps in the Measurement of Independence and Accountability of Central Banks

James Forder ()

Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: Measures of central banks' independence and central banks' accountability which are based on an interpretation of their statutes provide, in themselves, no guidance for the assessment of legislative proposals. In the effectiveness of monetary policy, the crucial considerations relate to how central banks and other policymakers behave. The pattern of incentives is not determined by the statutes, which may be wholly irrelevant, and therefore one cannot discover the effectiveness of policy by inspecting the statutes. On the other hand, an assessment of the democratic acceptability of an arrangement requires a normative argument. Depending on that argument, statutory characteristics may be the crucial ones, but for the assessment to be worthwhile, the argument must be explicit.

Keywords: BANKS; MONETARY POLICY; POLICY MAKING (search for similar items in EconPapers)
JEL-codes: C80 E58 (search for similar items in EconPapers)
Date: 2000
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Persistent link: http://EconPapers.repec.org/RePEc:oxf:wpaper:9923

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