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Traps in the Measurement of Independence and Accountability of Central Banks

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  • James Forder

Abstract

Measures of central banks` independence and central banks` accountability which are based on an interpretation of their statutes provide, in themselves, no guidance for the assessment of legislative proposals. In the effectiveness of monetary policy, the crucial considerations relate to how central banks and other policymakers behave. The pattern of incentives is not determined by the statutes, which may be wholly irrelevant, and therefore one cannot discover the effectiveness of policy by inspecting the statutes. On the other hand, an assessment of the democratic acceptability of an arrangement requires a normative argument. Depending on that argument, statutory characteristics may be the crucial ones, but for the assessment to be worthwhile, the argument must be explicit.

Suggested Citation

  • James Forder, 2000. "Traps in the Measurement of Independence and Accountability of Central Banks," Economics Series Working Papers 23, University of Oxford, Department of Economics.
    • Handle: RePEc:oxf:wpaper:23
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    References listed on IDEAS

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    Cited by:

    1. Aleksandra Maslowska, 2007. "Discussion on the Inconsistency of Central Bank Independence Measures," Discussion Papers 21, Aboa Centre for Economics.
    2. Aleksandra Maslowska, 2008. "Quest for the best: How to measure central bank independence and show its relation with inflation?," Discussion Papers 37, Aboa Centre for Economics.
    3. Frederic S. Mishkin, 2007. "Will Monetary Policy Become More of a Science?," NBER Working Papers 13566, National Bureau of Economic Research, Inc.
    4. Frederic S. Mishkin, 2011. "Monetary Policy Strategy: Lessons from the Crisis," NBER Working Papers 16755, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    central bank independence; measurement problems; political accountability;
    All these keywords.

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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