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Monetary Commitment, Institutional Constraints and Inflation: Empirical Evidence for OECD Countries since the 1970s Author info | Abstract | Publisher info | Download info | Related research | Statistics Andreas Freytag () (University of Jena, School of Busniess and Economics)
Friedrich Schneider () (Department of Economics, Johannes Kepler University Linz)
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Central bank independence (CBI) is a very important precondition for price stability. However, the empirical evidence for a correlation between both is relatively weak. In this paper, this weakness is countered with a) an extended measure of monetary commitment, which includes well-known criteria for CBI and external criteria such as convertibility and exchange rate regimes and b) the argument that monetary commitment can grant price stability best if it is backed by an adequate assignment of economic policy. An empirical assessment with data from four decades confirms the crucial role of monetary commitment for price stability.
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Paper provided by Friedrich-Schiller-University Jena, Max-Planck-Institute of Economics, Thueringer Universitaets- und Landesbibliothek in its series Jena Economic Research Papers in Economics with number
2007-002.
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Date of creation: 30 Mar 2007Date of revision:
Handle: RePEc:jrp:jrpwrp:2007-002Contact details of provider: Web page: http://www.jenecon.de
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Keywords: central bank independence ; price stability ; monetary commitment ; Other versions of this item:
Find related papers by JEL classification: E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
This paper has been announced in the following NEP Reports :
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