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Economics

Institutional Design of Independent Central Banks and Inflation Targeting

Quick fact

Countries with more independent central banks tend to have lower inflation, even when controlling for other economic factors. For example, Germany's Bundesbank, long known for its independence, was a model for the European Central Bank.

Why this is interesting

Why do some countries hand over control of their money supply to unelected officials? And how does a simple number like '2% inflation' keep prices stable?

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Institutional Design of Independent Central Banks and Inflation Targeting

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