1. CENTRAL BANK INDEPENDENCE IN RETROSPECT
28 September 2017
Address at Bank of England “Independence: 20 Years On” Conference, London
CENTRAL BANK INDEPENDENCE IN RETROSPECT
Guy Debelle Deputy Governor

2. How Independent Should a Central Bank Be?
Debelle and Fischer 1994
Goal Dependence
Instrument Independence

3. Goal Dependence/Instrument Independence
The Bundesbank and the output costs of inflation control (sacrifice ratio)
Theoretical literature
Rules v Discretion
Rogoff’s conservative central banker
Walsh’s performance contract/RBNZ
Empirical results
Increased CBI → Low inflation

4. Has CB Independence Delivered?
The NICE decade
Update the empirics: Balls et al
The UK
But what about the crisis?

5. Central bank independence under threat?
The crisis
Is CBI to blame?
Monetary policy the only game in town?
Distributional consequences of monetary policy
Ever been thus. Why more now?
Wages

6. Conclusion
Financial Stability and Independence
Accountability is key

7. CENTRAL BANK INDEPENDENCE IN RETROSPECT
28 September 2017
Address at Bank of England “Independence: 20 Years On” Conference, London
CENTRAL BANK INDEPENDENCE IN RETROSPECT
Guy Debelle Deputy Governor