Comparative Central Banking and the Politics of Monetary Policy

Meyer, Laurence H.
October 2001
Business Economics;Oct2001, Vol. 36 Issue 4, p43
Academic Journal
All central banks must steer a careful course between independence and accountability. There are four important mechanisms: legislative mandate, instrument independence, informal interactions with government, and government procedures to foster accountability. Inherent conflict between independence and accountability makes balance a crucial component of successful central banking. If this balance is not struck successfully and there is not a shared understanding of the roles of government and the central bank, it is unlikely that stabilization policy will be successful. Transparency is also important for credibility and accountability.


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