Central Bank Independence (1994)

Abstract

Until a few years ago, Central Banks were regarded as an integral part of the Government’s central policy-making machine. The phrase, ‘the Monetary Authorities’, was coined and used to describe the combined operations of the Central Banks and Treasury, under the political leadership of Chancellor/Treasurer and Prime Minister. The idea that a Central Bank might, or should, be independent of Central Government was simply not considered as a serious issue in most countries. Yet this is now an idea whose time has most certainly come.

Journal of International and Comparative Economics, 3 (1994).

This paper was initially given as an address to the Committee for the Economic Development of Australia (CEDA) in Melbourne on 1 November 1993. I am grateful to Jerome Stein for helpful comments. The usual disclaimers apply.