Bureaucrats and Central Bank Politics

摘要

Central bank independence is both a key legal and economic concept. In the economics literature, central bank independence was seen as the solution to the time inconsistency problem in monetary policy, where governments have an inflationary bias. In order to address this bias, economists suggested introducing a commitment to low inflation in monetary policy-making, which in practice was translated into central bank independence from government's inflationary pressures. The legal challenge was then to draft laws protecting monetary policy makers from pressures by other institutions. But does the independence of central banks make monetary policy a "neutral" endeavor?