Grace Koshie looks at the post-crisis role of central banks,
examining issues of fiscal dominance and weaker policy freedom in an
increasingly inter-connected world demanding ever-greater transparency
...................The debate about the central bank’s mandate and its independence
is an old one. The relationship between central bank autonomy (the words
‘independence’ and ‘autonomy are used interchangeably in this paper though
these words could have slightly different connotations) and the inflation rate
has been extensively investigated by the empirical economic literature. There
is a fair degree of consensus that a single mandate such as inflation targeting
is best for central bank credibility and for its independence. Today, there are
28 countries that use inflation targeting as a sole mandate, fixing the
consumer price index as their monetary policy goal over a timeframe of two to
three years................
1 comment:
Thanks, Mangesh, for placing this document here. After reading the gist and Dr Subbarao’s appreciation, I was waiting to read this. I know, several eyebrows will raise, doubting what way Warrier’s reading this will take the cause forward. Let me assure you, VITALINFO’s readers include people who can influence opinion of those who formulate policy in India. The well-researched article will be an eye opener for some of them.
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