How independent should a central bank be

摘要: The case for an independent central bank is becoming increasingly accepted. This new orthodoxy based on three foundations: the success of Bundesbank and German economy over past forty years; theoretical academic literature inflationary bias discretionary policy-making; empirical independence (CBI). purpose this paper to examine each legs argument increased CBI. ; First we evidence relationship between CBI economic performance. In context, compare experience with that in US conclude there indeed a tradeoff price output stability. We also sacrifice ratios recent disinflations show are positively correlated Second present model which allows us consider optimal degree inflation aversion bank. society will be better off if precommits rate, provided fiscal authority reasonably well behaved. tie these conclusions incentive contracts banks. Finally make distinction goal instrument Given exists variability, should not left bank, it have independence. Rather goals clearly specified, so then can accountable achieving goals. However, free its choice means achieve