Central bank independence with procedural accountability

Independent central banks must be effectively accountable, particularly when they engage in discretionary policies during a crisis. We argue that ex post assessment of central bank performance is insufficient for proper accountability. Using the inflationary episode that followed the Covid‐19 pandemic, we show that a central bank explicitly committed to an inflation‐targeting rule can deviate substantially from its target, with the extent of the deviation being identified only once it is already too late to correct it. We propose ‘procedural accountability’, a comprehensive framework for monetary policymaking. Drawing on the gold standard experience and existing rule‐based proposals, we specify the minimal formal architecture any such regime must satisfy.