FIGURE 18-3: Inflation and Central-Bank Independence This scatterplot presents the international experience with central-bank independence. The evidence shows that more independent central banks tend to produce lower rates of inflation.

Data from: Figure 1a, page 155, of Alberto Alesina and Lawrence H. Summers, “Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence,” Journal of Money, Credit, and Banking 25 (May 1993): 151–162. Average inflation is for the period 1955–1988.