Independence of the central bank: Too much power in the hands of unelected technocrats?

Otmar Issing

No 240, IMFS Working Paper Series from Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS)

Abstract: Under the overwhelming evidence of numerous empirical studies that found a negative correlation between the degree of independence and the level of inflation, many governments granted their national central banks independent status around 1990. With low inflation rates in the subsequent period - with the notable exception of the sharp price increases after 2020 - monetary policy largely confirmed the empirical findings. Consequently, one might expect that independence is now considered an undisputed element of sound central bank governance. However, this is by no means the case.

Date: 2026
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