The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Central Bank Independence

  • Carl E. Walsh
Reference work entry


Many countries have implemented reforms designed to grant their monetary authorities greater independence from direct political influence. These reforms were justified by research showing central bank independence was negatively correlated with average inflation among developed economies. An important line of research developed measures of central bank independence and studied their relationship with inflation and real economic activity. Different theoretical approaches have been used to model central bank independence. Critics of the reform movements towards central bank independence have expressed concerns that independence can weaken the accountability of central banks.


Bank of England Central bank independence Central banks European Central Bank (ECB) Federal Reserve System Inflation Inflation targeting Monetary policy Price stability Rational expectations Reserve Bank of New Zealand Rogoff-conservative central bank 

JEL Classifications

E52 E58 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Carl E. Walsh
    • 1
  1. 1.