A number of economists have investigated the relationship between macroeconomic performance and the degree to which central banks are insulated from partisan politics. They have examined the legal and institutional framework within which central banks in different countries operate, and constructed indexes of the extent to which their central banks are independent. Many researchers have constructed an index of central [...]
The central bank is regarded as the supreme monetary authority in every country, and accordingly it has to perform various useful functions for ensuring smooth functioning of the economy. Besides the discharge of certain traditional functions the central bank in a developing economy can play a special role, as is true of the Reserve Bank. This role can be understood [...]
Selective credit control refers to qualitative method of credit control by the central bank. The method aims, unlike general or quantitative methods, at the regulation of credit taken for specific purposes or branches of economic activity. It aims at encouraging good credit, i.e., development credit while at the same time discouraging bad credit, i.e., speculative credit. The techniques of selective [...]