Central bank independence should be defined as the ability to raise interest rates even when the government doesn't want rates to be raised; governments, as large borrowers, always prefer low rates, so true independence means resisting political pressure to keep rates low despite fiscal concerns
definitionpending
Speaker
Peter StellaEvidence Quote
“the way I've defined Central Bank Independence is the central bank is independent if it can raise interest rates when the government doesn't want it to raise interest rates”
Source
Debt Death Spirals, Fed's Losses, & Fiscal Theory Of Price Level | Peter Stella & Joseph Wang— Forward GuidanceCreated: 8/10/2026, 10:58:24 PM
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