Studies from University of Sydney Further Understanding of CDC and FDA (To Be or Not To Be? Central Bank Independence and Economic Turmoil): CDC and FDA

2025 OCT 01 (NewsRx) -- By a News Reporter-Staff News Editor at CDC & FDA Daily -- Data detailed on CDC and FDA have been presented. According to news reporting originating from Sydney, Australia, by NewsRx correspondents, research stated, “A few years ago, many economists believed that high inflation was over and the issue of central bank independence seemed out-of-date. In light of response to COVID-19, inflation has returned, reviving the monetary autonomy debate.”

Financial support for this research came from University of Sydney.

Our news editors obtained a quote from the research from the University of Sydney, “This paper proposes a model that sheds light on establishing central bank independence in the presence of economic shocks. We show that high rent from holding office, often related to corruption, leads to a lack of monetary autonomy, whereas the central bank is more likely to be independent when the future payoffs are less valuable, there is greater economic volatility, output is highly valuable in voter preferences, a big proportion of output economic shocks is passed onto inflation, or there is a greater variability in political competence. We also derive optimality conditions for each equilibrium.”

According to the news editors, the research concluded: “We find that equilibria with an independent central bank are always optimal and the lack of central bank independence cannot be optimal when almost all politicians are competent, all politicians are of similar quality, or output is highly valued in voter preferences.”

This research has been peer-reviewed.

For more information on this research see: To Be or Not To Be? Central Bank Independence and Economic Turmoil. Economic Theory, 2025. Economic Theory can be contacted at: Springer, One New York Plaza, Suite 4600, New York, Ny, United States. (Springer - www.springer.com; Economic Theory - http://www.springerlink.com/content/0938-2259/)

The news editors report that additional information may be obtained by contacting Anastasia Burkovskaya, University of Sydney, School of Economics, Parramatta Rd, Sydney, Nsw 2006, Australia.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1007/s00199-025-01681-1. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

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