Fiscal Dominate Hypothesis, Seigniorage and Central Bank Independence

After the theory of central bank independence was put forward, the theoretical and practical analysis of it has been focused on central bank independence of developed countries much more than on that of developing countries . Since the people live a poor life and the total size of the economy is not very big in the developing countries , the aspects of the social life have been influenced by the fiscal activities of the government, which have dominated the degree of central bank independence, and the problem of seigniorage has become sharp accordingly . Based on fiscal dominate hypothesis theoretically and the analysis of seigniorage, the thesis analyses the central bank independence of China after a brief introduction about that in developing countries is given.