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Over the last decade 34 industrial and developing countries central banks have been released from the clutches as puppets from the government and have been given (or increased) independence. As apposed to only three such changes during the 1980s (Maxfield 1997). The degree of independence is the topic of this assignment, which is should a central bank be allowed to have both political and economic power or just economic power? Full independence means that a central bank has both economic (instrument) and political (goal) power. For example the Bundesbank in Germany has full independence. Instrument independence means a central bank has only have economic power (e.g. interest rate control). For example the Bank of England has partial independence, in that it has instrument control but not objective power. Grilli et al (1991) define political independence as ‘the ability of the central bank to select its objectives without influence from the government’. The factors affecting these objectives are explained later. Grilli et al (1991) also define economic independence as ‘the ability to use instruments of monetary policy without restrictions’. The factors affecting the instruments are explained later. Ideas seem to be the cata