Central Bank Independence: A large issue in central banking and monetary policy is the actual structure of the central bank itself. This is because there is a natural tension between designing an institution which is concerned with the longrun wellbeing of an economy but at the same time holding the institution accountable in a democratic way which, given that election cycles can be relatively frequent, introduces short run incentives. For example, we know that if the unemployment level is too low, the economy can overheat, leading to greater inflation in the future. However, if a politician who hopes to be reelected in the short term demands that unemployment be kept low, long term considerations may be ignored. On the other hand, you may take the view that allowing the central bank to be fully independent from political influence and public oversight runs counter to democratic ideals, or that such independence could be dangerous if the current central bank regime proves to be incompetent. For a deeper discussion on these issues, you will be asked to read "Central Bank Independence" by Carl Walsh, which can be found on the course Blackboard site under "Ethics Assignment". Assignment: After reading the article above, you will be asked to write a paper in which you address the ethical issues concerning central bank independence, and give your opinion regarding these issues. In your paper, make sure to address all major ethical issues that you see, apply moral standards and ethical principles that are relevant to the case, evaluate arguments and facts and finally come as to what degree of central bank independence is optimal. In specific, I would like to see the following aspects addressed: 1. Identify all of the parties involved who have a stake in the ethical dilemma, describing the elements of the dilemma in detail. 2. Using your own judgement, discuss the costs and benefits to scenarios involving varying degrees of central bank independence. 3. Weigh your arguments against the economic insights and reasoning gained in class pertaining to monetary policy, give a policy recommendation as to the optimal level of central bank independence. Your paper should be around 2 pages (double-spaced)