Central Bank Independence Under Fiscal Dominance: Lessons from the Post-Pandemic Period

This paper examines the erosion of de facto central bank independence during the 2020–2023 period, in which emergency fiscal spending programmes placed sustained pressure on monetary authorities to maintain accommodative stances beyond the point warranted by inflation dynamics. Drawing on comparative case studies of the Federal Reserve, the Bank of England, and the European Central Bank, the paper argues that institutional design features alone are insufficient to preserve effective independence when fiscal dominance pressures are acute. A revised framework incorporating parliamentary oversight triggers is proposed.