|The effects of institutional independence on initial central bank responses to the COVID-19 crisis
The paper investigates whether institutional independence contributes positively to central bank responses to economic emergencies. The paper examines initial central bank responses to the economic effects of the covid-19 pandemic investigating the correlation between independence and policy responsiveness. A comparison is made of ECB, BoE and Fed responses to the economic upheaval caused by the global pandemic with their comparable reactions to the financial crisis of 2008. The paper offers an evaluation of the contribution of institutional independence in responding to economic emergency and assesses the balance between monetary and fiscal policies achieved in 2020. The paper offers a summary of the nature and role of central banks; explains the idea of institutional independence and its contribution to policy making, offers background to the economic impacts of the pandemic and positions the role of central banks within wider policy responses. An evaluation of central bank responses at the beginning of the pandemic, and the value of independence in articulating that response, contributes to the debate as to the nature, function, and future of central banking. The conclusions of the paper advance the debate on the value of independent institutions within a changing global political economy, placing focus on policy effectiveness while departing from a literature primarily concerned with policy design.
|Central Banking in a Post-Pandemic World
|25 Aug 2023
|Digital Object Identifier (DOI)