Reconsidering Central Bank Independence

The main task of central banks is to ensure price stability by adjusting short-term interest rates. To this end, they must be guaranteed independence from current day-to-day politics. This is part of the most widely accepted principles of modern monetary policy. In the new book "Reconsidering Central Bank Independence ”External linkExternal link, Professor Andreas Freytag de and his co-authors discuss recent trends that threaten this independence. Central banks are increasingly concerned with issues other than price stability. After the 2008 global financial crisis, for example, central banks expanded their balance sheets extensively, which overlapped considerably with the fiscal policy of the respective governments. This book examines the consequences of this shift on a broader range of policy challenges, calls for a return to a consensus role for central banks and analyzes what this could mean for their future independence