Kevin Milligan (@kevinmilligan.bsky.social)

Central Bank Independence (You Don't Know What You've Got ‘til It's Gone): The Doug Purvis Memorial Lecture | Canadian Public Policy This Doug Purvis Memorial Lecture, delivered at the 59th Annual Meetings of the Canadian Economics Association in May 2025, explores the evolution, benefits, and modern challenges of central bank independence (CBI), focusing on the Bank of Canada. It traces the Bank's development since it began operations in 1935 and compares its independence with peer institutions. The lecture highlights how CBI has supported Canada's macroeconomic stability, even as the Bank's COVID-19 response and post-pandemic inflation have challenged its legitimacy. To reinforce CBI, five steps are proposed: (1) codify price stability as the Bank's core mandate in legislation; (2) formalize governance for QE and QT; (3) strengthen forward guidance communication; (4) clarify fiscal–monetary co-ordination; and (5) establish regular, independent performance reviews. These reforms aim to preserve the Bank's credibility while enhancing transparency and accountability. In a world of rising debt and politicized economics, it remains essential to macroeconomic and financial stability that central banks continue to be strong and independent. https://doi.org/10.3138/cpp.2024-063