Googling central bank independence brings up a number of articles discussing central bank independence.

In summary and in layman's terms, why would it be advantageous for a central bank to be politically independent? What would be the disadvantages? Do adherents or opponents of political control over central banks tend to coincide with traditional political ideologies?

1 Answer 1


In layman's terms it is often considered that central banks should be independent of politics for the simple reason that the political actors don't trust themselves to make the best long-term decisions. There is a risk of politicians trying to influence a central bank decisions in advance of an election to create short-term economic growth which could in the long-run harm the economy.

There are no indications whatsoever that believing in central bank independence or more oversight coincide with traditional political ideologies. Even the National Bank of China (which regulates the yuan) has more leeway than you would imagine in China.

  • 1
    Interesting that you give China as an example, because the risk with elections may not be such a "problem" there.
    – gerrit
    Dec 9, 2012 at 15:36

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