The Political Limits of Independent Monetary Policy

Colin Ellis

Published: September 2016

Central banks in advanced economies have adopted a number of less conventional policy measures since the onset of the financial crisis and great recession. However, the efficiency of these measures remains highly uncertain; and, if downside risks crystallize, more radical approaches may be needed. In turn, that could force central banks to get explicit support from political authorities. As such, we may be near the political limits of independent monetary policy.