The independence of the CNB and its development since 1993 to the present

The independence of the Czech national bank and its development since 1993 to the present Summary The purpose of my thesis is to describe independence of the CNB as the crucial principle for the fulfilment of its primary monetary objective, which for the vast majority of central banks including CNB is to maintain price stability. The importance of price stability ensues from empirical experience with the world economy, which confirms that high and volatile inflation has negative economic consequences. The importance of central bank independence comes to the forefront here primarily because politicians may seek to compel the central bank to adopt measures that although in the short-run may boost economic growth, in the long run will lead to an undesirable rise in inflation. Economic growth will meanwhile return to its original level, or even sink to a lower level (as a result of the higher inflation). A sufficient degree of independence from political influence allows the central bank to resist such pressures. The thesis is composed of six sections, which are subdivided into chapters and subchapters. Section one is really an introduction to the thesis representing its whole structure and also purpose, for which topic of the thesis has been chosen. Section two is dedicated to development of central bank, The..