The evidence in Figure 18.9 suggests that increased central bank independence is associated with lower average rates of inflation, but there is no apparent relation with output growth. Based on this evidence:

a) Are lower rates of inflation a necessary outcome of increased independence?

b) If the central bank is independent, and its policy objective is to increase the growth rate of output, would you expect to see the same pattern as in the figure?

c) Could the observed relation in Figure 18.9 be more a function of policy credibility than independence?