Statutory Central Bank Independence in Taiwan


  •  Chiayang Hueng    

Abstract

<!-- /* Font Definitions */ @font-face {font-family:SimSun; panose-1:2 1 6 0 3 1 1 1 1 1; mso-font-alt:??; mso-font-charset:134; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:3 135135232 16 0 262145 0;} @font-face {font-family:????; panose-1:2 2 3 0 0 0 0 0 0 0; mso-font-alt:PMingLiU; mso-font-charset:136; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:3 137232384 22 0 1048577 0;} @font-face {font-family:"\@????"; panose-1:2 2 3 0 0 0 0 0 0 0; mso-font-charset:136; mso-generic-font-family:roman; mso-font-pitch:variable; mso-font-signature:3 137232384 22 0 1048577 0;} @font-face {font-family:"\@SimSun"; panose-1:2 1 6 0 3 1 1 1 1 1; mso-font-charset:134; mso-generic-font-family:auto; mso-font-pitch:variable; mso-font-signature:3 135135232 16 0 262145 0;} /* Style Definitions */ p.MsoNormal, li.MsoNormal, div.MsoNormal {mso-style-parent:""; margin:0cm; margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:12.0pt; font-family:"Times New Roman"; mso-fareast-font-family:????; mso-fareast-language:ZH-TW;} @page Section1 {size:612.0pt 792.0pt; margin:72.0pt 90.0pt 72.0pt 90.0pt; mso-header-margin:36.0pt; mso-footer-margin:36.0pt; mso-paper-source:0;} div.Section1 {page:Section1;} -->

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.



This work is licensed under a Creative Commons Attribution 4.0 License.