Question

To prevent monetary policy from becoming highly politicized, many countries have

Answer 1

Many countries have put politically independent central in control of the monetary policy. The widely popular belief behind this is that banks can operate on a daily basis on monetary policy operations without political pressure influencing their decision making or actions. Without any political connections, the banks normally provide more favorable inflation rates that do not stiffle economic growth. Without politics trying to use the bank to ceae temporary employment gains or superficial economic boosts, the policymakers can focus on the long term effects of their decisions based on the underlying potential of the current state of the economy.