Independence Under Fire

Central bank independence is relatively recent. For most of history, governments directly controlled money printing, often with disastrous results. Politicians facing elections naturally prefer low rates and easy money.

The shift accelerated in the 1980s, after the inflation disasters of the 1970s. Countries that let central banks raise rates without political approval generally achieved lower, steadier inflation.

Still, the pressure never stops. Presidents criticize rate decisions and parliaments threaten to rewrite mandates. The tension between democratic accountability and technocratic expertise is one of the great debates in modern economics.