Central Bank Independence, Disinflations and Monetary Policy
AbstractAnalyses of central bank independence (CBI) have generated two sets of apparently contradictory results - CBI appears to be both inversely related to inflation and positively related to the rise in unemployment and slowdown in economic growth during disinflations. I suggest that these results may issue from autonomous central banks being associated with sharper, more aggressive disinflations. To test the proposition I use two measures of policy stance, one of which contains more information concerning policymaker's expectations than has heretofore been the case. The results suggest a need to qualify yet further the optimality of CBI.
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Bibliographic InfoArticle provided by De Gruyter in its journal Business and Politics.
Volume (Year): 10 (2009)
Issue (Month): 3 (January)
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