Populism, political pressure and central bank (in)dependence

OPEN ECONOMIES REVIEW, 2020
Masciandaro, Donato; Passarelli, Francesco
Abstract

This article analyses the relationships between inequality, political pressure, populism and central bank independence (CBI). If there is financial inequality across citizens, monetary policies yield distributional consequences. Political pressure on central bank will increase. A populist wave fuelled by large demand for redistribution with no regard to long term consequences may undermine actual CBI.