The theoretical argument for central bank independence is based on the idea that even if the government represents people's preferences over inflation and output it has an incentive to renege from prearranged plans to gain a short run boost to output. This incentive leads to higher than desired...

For over a decade of practicing inflation targeting (IT) strategy, inflation has remained high and persistent while economic growth momentum has boosted in Ghana. This paper investigates the relative macroeconomic benefits of the IT strategy in Ghana based on business cycle fluctuations and...

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...