Today we are pleased to present a guest contribution written by Christopher A. Hartwell (ZHAW School of Management and Law, Switzerland), and Pierre Siklos (Professor Emeritus at Wilfrid Laurier University; and Balsillie School of International Affairs, Canada). 

A paper by the two of us, forthcoming in the International Journal of Central Banking, makes the case that poorly performing central banks – in particular, ones that continually miss their inflationary targets – not only undermine their own credibility, but also undermine a country’s institutional quality. Therefore, when asking: What Damage Can a Poorly Performing Central Bank Do? The answer is: quite a lot, actually. Such a conclusion has far-reaching ramifications for institutional development, leading to less overall economic resilience.

Ever since the policy of central bank autonomy spread around the globe, monetary authorities have played, some would say, an outsized role in determining the path of a country’s economy. Given

Keep reading this article on Econbrowser Blog - James Hamilton & Menzie Chinn.

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