Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the reputation of central banks. Thus, central banks should not...

The rise of central bank independence (CBI) raises questions regarding the importance of CBI for economic growth. Where conventional theory focuses on the link between CBI and inflation as the common primary objective of any central bank is price stability, this paper explores the theoretical...