Draft:Independent Central Bank (ICB): Difference between revisions

Source: Wikipedia, the free encyclopedia.
Browse history interactively
← Previous editNext edit →
Content deleted Content added
VisualWikitext
AfC-submit-wizard
AFCH 0.9.1)
Line 1: Line 1:
⚫
{{AFC submission|d|essay|u=Toml22563|ns=118|decliner=Vanderwaalforces|declinets=20231121051843|ts=20231121032542}} <!-- Do not remove this line! -->
{{AFC submission|d|nn|u=Toml22563|ns=118|decliner=WikiOriginal-9|declinets=20231116131050|small=yes|ts=20231116121140}} <!-- Do not remove this line! -->

{{Draft topics|business-and-economics|politics-and-government}}
{{Draft topics|business-and-economics|politics-and-government}}
{{AfC topic|other}}
{{AfC topic|other}}
{{AfC submission|||ts=20231121032542|u=Toml22563|ns=118}}
⚫
{{AFC submission|d|nn|u=Toml22563|ns=118|decliner=WikiOriginal-9|declinets=20231116131050|ts=20231116121140}} <!-- Do not remove this line! -->


⚫
An Independent Central Bank (ICB) is a central bank that is not subject to government interference in its monetary policy decisions.This means that the central bank is free to set interest rates, print money, and other monetary policies without being influenced by political considerations.<ref>Acemoglu, D.; Johnson, S.; Querubin, P.; and Robinson, J. A. (2008) “When Does


⚫
An Independent Central Bank (ICB) is a central bank that is not subject to government interference in its monetary policy decisions.This means that the central bank is free to set interest rates, print money, and other monetary policies without being influenced by political considerations<ref>Acemoglu, D.; Johnson, S.; Querubin, P.; and Robinson, J. A. (2008) “When Does
Policy Reform Work? The Case of Central Bank Independence.” Brookings Papers
Policy Reform Work? The Case of Central Bank Independence.” Brookings Papers
on Economic Activity 39: 351–429.</ref>.
on Economic Activity 39: 351–429.</ref>.
Line 21: Line 20:
www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html.
www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html.
</ref>. Third, ICBs are typically held accountable for their performance, which means that they are subject to public scrutiny and can be removed from office if they do not meet their objectives
</ref>. Third, ICBs are typically held accountable for their performance, which means that they are subject to public scrutiny and can be removed from office if they do not meet their objectives



ICBs have a number of advantages over central banks that are subject to government interference. First, ICBs are more likely to achieve their objectives, such as price stability. Second, ICBs are more likely to be transparent and accountable, which can help to build public trust in the central bank. Third, ICBs can be more flexible in their monetary policy decisions, which can help to respond to economic shocks.
ICBs have a number of advantages over central banks that are subject to government interference. First, ICBs are more likely to achieve their objectives, such as price stability. Second, ICBs are more likely to be transparent and accountable, which can help to build public trust in the central bank. Third, ICBs can be more flexible in their monetary policy decisions, which can help to respond to economic shocks.
Line 29: Line 27:
Overall, ICBs are generally seen as being more credible and effective than central banks that are subject to government interference. However, there are also some potential drawbacks to ICBs that need to be considered<ref>Bodea, C., and Hicks, R. (2015) “Price Stability and Central Bank Independence:
Overall, ICBs are generally seen as being more credible and effective than central banks that are subject to government interference. However, there are also some potential drawbacks to ICBs that need to be considered<ref>Bodea, C., and Hicks, R. (2015) “Price Stability and Central Bank Independence:
Discipline, Credibility, and Democratic Institutions.” International Organization 69 (1):
Discipline, Credibility, and Democratic Institutions.” International Organization 69 (1):
35–61.</ref>.
35–61.</ref>


Here are some examples of ICBs:
Here are some examples of ICBs:

Revision as of 05:18, 21 November 2023

An Independent Central Bank (ICB) is a central bank that is not subject to government interference in its monetary policy decisions.This means that the central bank is free to set interest rates, print money, and other monetary policies without being influenced by political considerations.[1].

ICBs are generally seen as being more credible and effective than central banks that are subject to government interference. This is because ICBs are more likely to prioritize price stability, which is one of the main goals of monetary policy[2].

There are a number of reasons why ICBs are seen as being more credible. First, ICBs are typically given clear objectives for monetary policy, such as achieving a low and stable rate of inflation[3]. Second, ICBs are typically given a high degree of autonomy, which means that they are not subject to government pressure to deviate from their objectives[4]. Third, ICBs are typically held accountable for their performance, which means that they are subject to public scrutiny and can be removed from office if they do not meet their objectives

ICBs have a number of advantages over central banks that are subject to government interference. First, ICBs are more likely to achieve their objectives, such as price stability. Second, ICBs are more likely to be transparent and accountable, which can help to build public trust in the central bank. Third, ICBs can be more flexible in their monetary policy decisions, which can help to respond to economic shocks.

However, there are also some potential drawbacks to ICBs. First, ICBs may be less responsive to the needs of the government, which can lead to conflicts between the central bank and the government. Second, ICBs may be more likely to pursue policies that benefit certain groups in society, such as large corporations or wealthy individuals. Third, ICBs may be less accountable to the public, which can lead to a lack of transparency and accountability.

Overall, ICBs are generally seen as being more credible and effective than central banks that are subject to government interference. However, there are also some potential drawbacks to ICBs that need to be considered[5]

Here are some examples of ICBs: 

   The Federal Reserve System in the United States
   The Bank of England in the United Kingdom
   The Bank of Japan in Japan
   The European Central Bank in the Eurozone

References

  1. ^ Acemoglu, D.; Johnson, S.; Querubin, P.; and Robinson, J. A. (2008) “When Does Policy Reform Work? The Case of Central Bank Independence.” Brookings Papers on Economic Activity 39: 351–429.
  2. ^ Powell, J. (2018) “Financial Stability and Central Bank Transparency.” Available at www.federalreserve.gov/newsevents/speech/files/powell20180525a.pdf.
  3. ^ Wachtel, P. (2017) “Monetary Policy and the Financial CHOICE Act.” In M. Richardson, K. Schoenholtz, B. Tuckman, and L. J. White (eds.), Regulating Wall Street: CHOICE Act vs. Dodd-Frank. New York: Stern School of Business, New York University (March).
  4. ^ Mersch, Y. (2017) “Central Bank Independence Revisited.” Symposium on Building the Financial System of the 21st Century: An Agenda for Europe and the United States, Frankfurt am Main, March 30. Available at www.ecb.europa.eu/press/key/date/2017/html/sp170330.en.html.
  5. ^ Bodea, C., and Hicks, R. (2015) “Price Stability and Central Bank Independence: Discipline, Credibility, and Democratic Institutions.” International Organization 69 (1): 35–61.
Retrieved from "https://en.wikipedia.org/w/index.php?title=Draft:Independent_Central_Bank_(ICB)&oldid=1186142958"