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Central bank independence, policies and reforms: addressing political and economic linkages

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  • Marianne, Ojo

Abstract

Whilst economic, political linkages and relationships constitute the theme of this paper, the paper also attempts to address why central bank independence still lacks certain vital attributes which embody adequate governance and accountability mechanisms - which are necessary if better results in relation to longer term economic and political objectives, in particular, are to be achieved. From this perspective, the growing importance of the shift to a focus on distinguishing between micro and macro prudential regulation is illustrated. The need for such distinction is not just evidenced through the creation of agencies responsible for such affairs within particular jurisdictions which are considered in this paper, but also through the increased realisation and need for greater focus on decision making responsibilities which are to be assigned to political and economic entities at supra national levels. Financial stability, it appears, has more to do with a mere focus on longer term objectives. Financial stability is also concerned with the ability to sustain long term policy objectives whilst being flexible enough to respond effectively to short term unpredictabilities.

Suggested Citation

  • Marianne, Ojo, 2014. "Central bank independence, policies and reforms: addressing political and economic linkages," MPRA Paper 54205, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:54205
    as

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    File URL: https://mpra.ub.uni-muenchen.de/54205/1/MPRA_paper_54205.pdf
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    References listed on IDEAS

    as
    1. Michael J Ashton, 2012. "“Real-Feel” Inflation: Quantitative Estimation of Inflation Perceptions," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 47(1), pages 14-26, January.
    2. Donald Kohn, 2013. "Federal Reserve Independence in the Aftermath of the Financial Crisis: Should We Be Worried?," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 48(2), pages 104-107, April.
    3. Guillermo Ortiz, 2012. "What Can the Developed World Learn from the Latin American Debt and Mexican Peso Crisis?," Business Economics, Palgrave Macmillan;National Association for Business Economics, vol. 47(1), pages 2-13, January.
    4. Brunner, Karl & Cukierman, Alex & Meltzer, Allan H., 1980. "Stagflation, persistent unemployment and the permanence of economic shocks," Journal of Monetary Economics, Elsevier, vol. 6(4), pages 467-492, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    inflation targeting; monetary policies; central banks; fiscal policies; accountability; governance arrangements; momentum effects;
    All these keywords.

    JEL classification:

    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment
    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • G2 - Financial Economics - - Financial Institutions and Services
    • K2 - Law and Economics - - Regulation and Business Law

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