Economic and legal analysis of independence and accountability of central banks

The first part defines the terms "independence" and "accountability" and asks whether there is a direct or indirect relation between them. The second part brings quantification of central bank's institutional arrangements both in developed and transition economies. The third part describes theoretical foundations of central bank independence and accountability and analyses empirical research on this topic. The fourth part inquires the model of institutional arrangement in which the central bank has the completed operational independence but it has the limited goal independence (monetary policy's goals are set in agreements between the government and central bank). The fifth part asks the question whether the model proposed above complies or not with the European law.

Keywords: monetary policy, government, central bank, independence