On the Long and Short of Central Bank Independence

This paper by Alberto Musalem of the International Monetary Fund finds that higher central bank independence increases fiscal discipline and results in lower inflation. However, it finds that higher central bank independence does not necessarily lead to higher growth. In fact, higher central bank independence is frequently suboptimal for a wide set of stylised economies.

On the Long and Short of Central Bank Independence, Policy Coordination, and Economic Performance by Alberto Musalem, Policy

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