Central bank independence crucial in navigating economic shocks post-global crisis
Central bank independence has been a key factor in modern governance. The article looks at how politicians influence central bank decisions during economic crises. By studying the period from the 1970s to the 2010s, the researchers found that central bank independence evolved in response to macroeconomic shocks like the Great Recession. Their analysis shows that politicians can shape central bank governance based on citizens' wishes and their own interests. This evolution was supported by empirical evidence using new indices of dynamic central bank independence.