Does central bank independence lower inflation?

M Ismihan, F G Ozkan

Research output: Contribution to journalArticlepeer-review


This paper provides a potential explanation for the recent findings of no significant relationship between central bank independence (CBI) and lower inflation. We argue that although CBI delivers lower inflation in the short-term, it may reduce the scope for productivity enhancing public investment and so harm future growth potential. We also argue that the effects on growth make CBI less likely to achieve lower inflation in the long-term. (C) 2004 Elsevier B.V. All rights reserved.

Original languageEnglish
Pages (from-to)305-309
Number of pages5
JournalEconomics Letters
Issue number3
Publication statusPublished - Sept 2004


  • central bank independence
  • public investment
  • inflation

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