The Idea of Central Bank Independence
Advocates of central bank independence seek to insulate the institution from political pressure while making decisions regarding the interest rate and other monetary policy tools. Critics of central bank independence point to monetary authorities not being accountable to the legislative or executive branches, unconventional monetary policy tools that were meant to be temporary becoming semi-permanent, and winners and losers being created in the course of keeping interest rates low. In practice, the degree of central bank independence varies widely with respect to political autonomy, economic autonomy, financial autonomy and legal autonomy.
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