Independence central bank?how to keep independence the advantage and disadvantage of independence of central bank | |
Independence central bank?how to keep independence the advantage and disadvantage of independence of central bank | |
The relationship between the Central Bank and government stems back to the Bank of England and the Peel Acts. It was granted special privileges and responsibilities and was created to primarily bail out long history of government insolvency.
Despite this close evolution of the relationship between a Central Bank and a federal government have tried to distance politics from Central Bank policies and this has had a positive on inflation. The more independent a Central Bank is from the federal government, the less likely you will experience inflation.