Statutory Central Bank Independence in Taiwan

Chiayang James Hueng

Abstract


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This paper critically reviews the Central Bank of the Republic of China (Taiwan) Act and finds that the level of legal independence of the central bank is relatively low compared to the rest of the world.  However, Taiwan has been able to combine low inflation with a legally dependent central bank.  We provide possible explanations to this low inflation/low independence puzzle in Taiwan and argue that Taiwan should still follow the trend of creating a more independent central bank.


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Asian Social Science   ISSN 1911-2017 (Print)   ISSN 1911-2025 (Online)

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