S/E/74. Central banks' focus on price stability requires a set of legal and institutional arrangements in order to achieve that goal

The discussion will be based on the argument of traditional economic theory according to which the main ingredient required to preserve the purchasing power of money is Central Bank Independence (CBI). After a brief review of the basic concepts of monetary theory, and the review of the theoretical foundation of CBI, it will be discussed how various institutional and legal arrangements can ensure different degrees of CBI, and how an independent CB can affect the potential to reach the goal of price stability. It is also discussed another issue related to CBI, i.e. CBs' accountability.