54 Pages Posted: 8 Feb 2001
Date Written: February 2000
This paper reviews recent research on central bank independence (CBI). After we have distinguished between independence and conservativeness, the literature on optimal inflation contracts is discussed, followed by research in which the inflationary bias is endogenised. Finally, the various challenges that have been raised against previous empirical findings on CBI are reviewed. We conclude that the negative relationship between CBI and inflation is quite robust.
JEL Classification: D72, E58
Suggested Citation: Suggested Citation
Berger, Helge and de Haan, Jakob and Eijffinger, Sylvester C. W., Central Bank Independence: An Update of Theory and Evidence (February 2000). CESifo Working Paper Series No. 255. Available at SSRN: https://ssrn.com/abstract=258970