Legal Central Bank Independence and Inflation in Latin America During the 1990's
AbstractThis paper reviews central banks’ legal reform in Latin America during the 1990s and discusses the status of central bank independence in the region. Based on this information, it builds a simplified index of central bank independence which, in addition to the commonly used criteria of political and economic independence, incorporates provisions of central banks’ financial autonomy, accountability, and lender-of-last-resort. The paper finds a moderate negative correlation between increased central bank independence and inflation during 1999–2001 in 14 Latin American countries. Dissagregating the index, the same analysis suggests that economic independence is the key component driving the observed negative correlation between legal central bank independence and inflation.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 01/212.
Date of creation: 01 Dec 2001
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Postal: International Monetary Fund, Washington, DC USA
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Other versions of this item:
- Luis I. Jacome H., 2002. "Legal Central Bank independence and inflation in Latin America during the 1990s," Revista de Análisis del BCB, Banco Central de Bolivia, vol. 5(1), pages 157-194, June.
- B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
- B59 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches - - - Other
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- Ourania Dimakou, 2010. "Central Bank Independence, Bureaucratic Corruption and Fiscal Responses - Empirical Evidence," Birkbeck Working Papers in Economics and Finance 1012, Birkbeck, Department of Economics, Mathematics & Statistics.
- Noha Farrag & Ahmed Kamaly, 2007. "Measuring the Degree of Central Bank Independence in Egypt," Working Papers 4, The German University in Cairo, Faculty of Management Technology.
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