What happens to central banks under pressure?

This Planet Money episode investigates the importance of central bank independence and the potential economic consequences when political influence erodes that independence. The hosts, Erika Beras and Mary Childs, consult three central bank watchers: Carolina Gariga, Lev Manand, and Carola Binder. Gariga's research links central bank independence to economic stability using data from 192 countries. Manand is refining the metrics used to assess central bank independence, distinguishing between de jure and de facto independence. Binder's research focuses on instances of political pressure on central banks and their responses, linking succumbing to pressure with higher inflation. The episode highlights that once central bank independence is lost, it's difficult to regain, potentially leading to long-term economic instability and a loss of credibility, using examples like Argentina, Turkey, and the U.S.