This paper proposes that central bank independence alone is insufficient to explain low inflation. It argues instead that central bank independence may be interconnected with public attitudes towards inflation via a historical feedback process that has led to an anti-inflation culture and public...

Granting central banks independence from short-term political control is widely assumed to decrease inflation by increasing the credibility of commitments to price stability. This paper analyzes public- and private-sector behavior in a sample of seventeen OECD countries for evidence of...

On theoretical grounds, a clear distinction exists between central bank independence and inflation aversion. In the conduct of monetary policy, both contribute to lower inflation. In this paper, we empirically re-examine the nexus between central bank independence and inflation for a large...

The 1989 Reserve Bank of New Zealand Act provides a natural experiment in which the effects of institutional change on economic relationships can be studied. The Act set price stability as the single objective of monetary policy and gave the Bank great independence in achieving that goal. We...

Discussions of central bank independence usually centre around monetary policy, specifically the freedom of central banks to use interest rates to tackle inflation. However, as the financial crisis showed, financial stability is also important and this requires robust supervision/regulation of...