Central bank independence: An increasingly complex issue

Central bank independence is normally associated with monetary neutrality: if monetary policy has an effect on inflation only in the long term (and not on the real economy), it is pointless for monetary policy to be coordinated with other economic policies. The central bank can then be independent with an inflation target, which will not interfere with other economic policy objectives. But what is the situation today? Central banks: Focus on employment and inequality; Enable governments to conduct expansionary fiscal policies; Want to encourage and accelerate the energy transition, by favouring "green" financing; And moreover, there is no link between money supply and goods and services prices in the long term. We are too far from monetary neutrality and from central banks that have only an inflation target, and there is therefore no longer any theoretical basis for central bank independence.