Theory and empirical evidence show that low inflation is a precondition for economic growth. Independent central banks and fixed exchange rates are institutional mechanisms that help keep in ation low by lending monetary policy credibility to governments. However, the two institutions are...

Independent central banks prefer balanced budgets due to the long-run connection between deficits and inflation and can enforce their preference through interest rate increases and denial of credit to the government. We argue that legal central bank independence (CBI) deters fiscal deficits...

Research on central bank independence (CBI) focuses overwhelmingly on domestic causes and consequences. We consider CBI in relation to global finance. A first step links government decisions to reform central bank legislation to a perceived need to attract capital in the form of foreign direct...

In the last three decades, legal delegation of monetary policy to independent central banks (CBI) has achieved the status of a global norm of good governance. The recent backlash against this independence is an important but understudied trend. Our paper analyzes the potential for delegation...

Central bank independence is a common feature in advanced economies. Delegation of monetary policy to an independent central bank with a clear mandate for price stability has proven to be successful in keeping a check on inflation and providing a trusted currency. However, it is also a fact that...