Abstract
We re-examine the relationship between central bank independence (CBI), proxied by the central bank governor’s turnover rate and an indicator based on central bank laws in place, and inflation using a random coefficient model with the Hildreth-Houck estimator for more than 100 countries in the period 1980 to 2005. We conclude that there exists no general significant negative relation between our indicators of central bank independence and inflation. Central bank independence has a significant effect only in a minority of the countries in our sample.
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Klomp, J., de Haan, J. Central bank independence and inflation revisited. Public Choice 144, 445–457 (2010). https://doi.org/10.1007/s11127-010-9672-z
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DOI: https://doi.org/10.1007/s11127-010-9672-z
Keywords
- Central bank independence
- Heterogeneous panel model
- Inflation
- Monetary institutions
- Turnover of central bank governors
JEL Classification
- E58