Essay on Central Bank Of New Zealand

1369 Words Mar 24th, 2016 6 Pages
Central banks have never been stronger than now since they play an ultimate role in the growth of economies. Monetary policy is seen as the central tool of macroeconomic stabilization, and in some countries monetary policy is implemented by an independent central bank (Blinder, 1998). According to Singleton (2011), the world central banks have experienced two revolutions in the 1940s and 1980s, respectively. The former indicates that the central banks were less autonomous and were controlled by the governments with regard to the setting and implementation of macroeconomic policy. The latter stage shows the great progress in the notion of CBI, especially in developed countries. In the early time of this stage, a series of industrial countries applied the principle of CBI into practices by renewing their law systems so that the central banks, such as the Reserve Bank of New Zealand in 1988, Bank of Canada in 1991, and Bank of England in 1993, had their own authority to carry out the monetary policy independently without caring about the interference of political pressures from the governments (RBNZ, 2004, p.7).

Although there were commonalities shared by the central banks in the second revolution, there were some different features that could be recognized individually. To do so, making comparison is perhaps one of the best methods to recognize why they are different or similar by nature or by legislation. There have been, however, so far just a few research to make a…

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