One reason put forward in favor of central bank independence is that an independent central bank is better at overcoming the Time Consistency Problem. What is the Time Consistency Problem" and how is it that independence helps a central bank to overcome problems?

One reason put forward in favor of central bank independence is that an independent central bank is better at overcoming the Time Consistency Problem. What is the Time Consistency Problem" and how is it that independence helps a central bank to overcome problems?

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter22: Money Growth And Inflation

Section: Chapter Questions

Problem 3PA

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Q-1) One reason put forward in favor of central bank independence is that an independent central bank is better at overcoming the Time Consistency Problem.

What is the Time Consistency Problem" and how is it that independence helps a central bank to overcome problems?

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