Vol 5, No 9 (2001)

The understanding of the relation between democracy and an independent central bank is an important question. Monetary policy is not only a technical question for experts, its formulation and execution is a political issue, which means power relations in a society. Consequently, benefits and costs of an economic policy are unequally distributed. This article includes three parts: The first one tells us what a central bank is and the reasons why we are in favour of an independent central bank; in addition, we make two fundamental critics to independency, namely to its protocols and self interests. In the second part we set forth the relation between independency and democracy. In the third part we deal with democracy and central bank in the Colombian style, as well as with critics to the Banco de la República independency. At the end we make some reflections as a conclusion.