Reconsidering the Principal Components of Central Bank Independence: The More the Merrier?
AbstractThe authors use principal component analysis to reassess the link between different attributes of central bank independence and inflation performance. They suggest that coding problems may account for the fact that almost none of the attributes included in the Cukierman index has a systematic, plausible relationship with inflation. The multifaceted Cukierman index also seems to be outperformed by a much narrower index focusing solely on policy independence. These findings point to the importance of using public choice analysis to isolate the real problem here: namely, finding specific central bank structures that effectively insulate central bankers from political pressures. Copyright 1998 by Kluwer Academic Publishers
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Bibliographic InfoArticle provided by Springer in its journal Public Choice.
Volume (Year): 97 (1998)
Issue (Month): 1-2 (October)
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Web page: http://www.springerlink.com/link.asp?id=100332
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- Richard C.K. Burdekin & King Banaian & Mark Hallerberg & Pierre L. Siklos, 2011. "Fiscal and monetary institutions and policies: onward and upward?," Journal of Financial Economic Policy, Emerald Group Publishing, vol. 3(4), pages 340-354, November.
- Aleksandra Maslowska, 2008. "Quest for the best: How to measure central bank independence and show its relation with inflation?," Discussion Papers 37, Aboa Centre for Economics.
- Siklos, Pierre L., 2000. "Monetary policy transparency, public commentary, and market perceptions about monetary policy in Canada," Discussion Paper Series 1: Economic Studies 2000,08, Deutsche Bundesbank, Research Centre.
- Aleksandra Maslowska, 2007. "Discussion on the Inconsistency of Central Bank Independence Measures," Discussion Papers 21, Aboa Centre for Economics.
- Martin T. Bohl & David G. Mayes & Pierre L. Siklos, 2011.
"The Quality Of Monetary Policy And Inflation Performance: Globalization And Its Aftermath,"
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- Bohl , Martin T & Mayes , David G & Siklos, Pierre L, 2009. "The quality of monetary policy and inflation performance: globalization and its aftermath," Research Discussion Papers 31/2009, Bank of Finland.
- King Banaian, 2007. "Measuring Central Bank Independence: Ordering, Ranking, or Scoring?," Working Papers 2008-3 Classification-E58, Saint Cloud State University, Department of Economics, revised 28 Feb 2008.
- Siklos, Pierre L., 2008. "No single definition of central bank independence is right for all countries," European Journal of Political Economy, Elsevier, vol. 24(4), pages 802-816, December.
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