To do so, making comparison is perhaps one of the best methods to recognize why they are different or similar by nature or by legislation. There have been, however, so far just a few research to make a comparison the central banks among countries. Tache & Danu (2014) conducted a survey on three main central banks, namely the European Central Bank (ECB), the US Federal Reserve (Fed), and the Bank of Japan (BoJ), in three areas that are central banks’ goals, the organizational structures, strategies and tools of monetary policy. The authors concluded three main points as follows: first, ECB is more decentralized than the Fed and the BoJ; second, the main role of central banks is to carry out the monetary policy, but BoJ and ECB 's most key aim is price stability with an exact quantitative target, and this opinion is different to the Fed which focused on qualitative explanations of price stability; and Last, in terms of institutional structures, ECB and the Fed show similarities while BoJ works more …show more content…
The more comprehensive, well-defined, straightforward, and widely recognized in the literature review, however, is a methodology used by Cukierman, Webb, Miller & Neyapti (Crowe & Meade, 2007, p.71). This measure was created in 1992 and had a small revision in 2002. They use this method to measure the independence of the central banks in 72 countries around the world. It is a well-known approach because it can be used for most countries including industrial, transition and developing ones. Because of this, this method is used in this research to figure out the independence of the central bank and its relation to the price stability in Vietnam and New Zealand. Simply, it is called an overall index of inflation-based central bank independence. The summary of this indicator is described underneath