ABSTRACT
FOR THE BANK OF ENGLAND’S 1995 Central Bank Governors’ Symposium, Charles Goodhart, Alvaro Almeida and I (Fry, Goodhart and Almeida 1996) surveyed the objectives, activities and independence of central banks in developing countries. One striking finding was that developing countries suffered considerably higher inflation than the OECD countries. While the proximate cause was more rapid money growth, we suggested that a more fundamental cause was that developing country governments resorted to their central banks much more for deficit financing.
