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Central Bank Independence and inflation: the case of Greece

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  • Theodore Panagiotidis
  • Afroditi Triampella

Abstract

This paper discusses the argument for Central Bank Independence (CBI) in the case of Greece. Using a time series approach and the last data available before Greece joined the EMU , the hypothesis that Central Bank Independence is important for controlling inflation is examined. Employing two indices, which serve as proxies for CBI, LegalCBI and TOR, the inverse relationship between CBI and inflation was confirmed. The interactions between the variability of inflation and CBI were also investigated. Furthermore, evidence was found to suggest that the rate of turnover Granger causes inflation.

Suggested Citation

  • Theodore Panagiotidis & Afroditi Triampella, 2006. "Central Bank Independence and inflation: the case of Greece," Revista de Economía del Rosario, Universidad del Rosario, June.
    • Handle: RePEc:col:000151:002112
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    File URL: http://revistas.urosario.edu.co/index.php/economia/article/view/1106/1000
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    References listed on IDEAS

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    Cited by:

    1. Ayadi, Felix & Ojo, Marianne, 2013. "Central bank independence: monetary policies in selected jurisdictions (II)," MPRA Paper 45684, University Library of Munich, Germany.
    2. Alesina, Alberto Francesco, 2008. "Comments on "When Do Policy Reforms Work?' by Daron Acemoglu et al," Scholarly Articles 12553722, Harvard University Department of Economics.
    3. Posso, Alberto & Tawadros, George B., 2013. "Does greater central bank independence really lead to lower inflation? Evidence from panel data," Economic Modelling, Elsevier, vol. 33(C), pages 244-247.
    4. Edward Seyler & John Levendis, 2013. "What was the Role of Monetary Policy in the Greek Financial Crisis?," South-Eastern Europe Journal of Economics, Association of Economic Universities of South and Eastern Europe and the Black Sea Region, vol. 11(2), pages 117-137.
    5. Jane Bogoev & Goran Petrevski & Bruno S. Sergi, 2012. "Investigating the Link Between Central Bank Independence and Inflation in Central and Eastern Europe," Eastern European Economics, Taylor & Francis Journals, vol. 50(4), pages 78-96, July.
    6. Philipp F. M. Baumann & Enzo Rossi & Alexander Volkmann, 2020. "What Drives Inflation and How: Evidence from Additive Mixed Models Selected by cAIC," Papers 2006.06274, arXiv.org, revised Aug 2022.
    7. Goran Petrevski & Jane Bogoev & Bruno Sergi, 2012. "The link between central bank independence and inflation in Central and Eastern Europe: are the results sensitive to endogeneity issue omitted dynamics and subjectivity bias?," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 34(4), pages 611-652.

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    More about this item

    Keywords

    Central Bank Independece; inflation; Greece;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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