1. Is full (i.e. instrument and goal) central bank independence
... pressure for low inflation, while on the other hand it may encourage processes that make it easier for the government to influence monetary policy, thereby reducing actual independence. Cukierman et al conclude that there is a vicious circle between inflation and low levels of inflation. When sufficiently sustained, inflation erodes CBI. Then low independence contributes to higher inflation. De ... found that New Zealand, who had the lowest independence had the highest fiscal deficit and the United States with the highest independence had a similar deficit to the other countries. Grilli...
- Word Count: 4086
- Approx Pages: 16
- Grade Level: Undergraduate