5 Cukierman goes on to note, however, that the causality from independence to lower inflation is not clear, and several studies over the past 10 to 15 years have found conflicting results on that front. 6 Let me touch on four issues that are now an essential part of the understanding of central bank independence, but that were less prominent in the 1990s.
First, there is a distinction between the terms monetary policy independence and central bank independence. In the literature that developed before the global financial crisis, central bank independence referred to independence from political influences in the setting of monetary policy. But many central banks have roles outside monetary policy – in particular, bank regulation and supervision.