Empirical evidence shows that in countries where central banks are relatively independent from their governments, there has been higher inflation and lower economic growth rates than in countries where central banks are closely tied to their governments.

Question

Quizplus · Accepted Answer

Empirical evidence suggests that countries with more independent central banks have lower inflation and higher economic growth rates. This is because independent central banks can focus on achieving stable prices and can resist pressure from governments to pursue expansionary policies that may lead to inflation.

Empirical Evidence Shows That in Countries Where Central Banks Are