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Central Bank Independence and Economic Performance

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  • Athanasios Anastasiou

    (Department of Economics, University of Patras)

Abstract

This paper examines the influence that several factors may have on the relationship between legal Central Bank Independence (CBI), on the one hand, and the inflation and real GDP growth on the other. Using multivariate regression analysis for 39 OECD during the two periods, 1991-1998 and 1999-2006, we show that even if we include several control variables in the regression, the negative relationship between CBI and inflation, and the lack of relationship between CBI and the variability of real GDP growth remaining were unaffected. Also, we decompose the index of CBI into its four components and we examine whether they matter for inflation, for real GDP growth and for the sacrifice ratio.

Suggested Citation

  • Athanasios Anastasiou, 2009. "Central Bank Independence and Economic Performance," Cyprus Economic Policy Review, University of Cyprus, Economics Research Centre, vol. 3(1), pages 123-156, June.
    • Handle: RePEc:erc:cypepr:v:3:y:2009:i:1:p:123-156
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    2. Athanasios ANASTASIOU & Vasiliki KREMASTIOTI, 2021. "The impact of taxation on growth: the case of Greece," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(2(627), S), pages 285-293, Summer.
    3. Athina Zervoyianni & Athanasios Anastasiou & Andreas Anastasiou, 2014. "Does central bank independence really matter? Re-assessing the role of the independence of monetary policy-makers in macroeconomic outcomes," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 8(4), pages 427-473.
    4. Allan Silveira Dos Santos & Maria Helena Ambrosio Dias & Joilson Dias & Érica Oliveira Gonzales, 2014. "Monetary Programming, Turnover Of The Directors Of Central Bank And Interest Rate Determination: Reaction Function Applications For Brazil," Anais do XLI Encontro Nacional de Economia [Proceedings of the 41st Brazilian Economics Meeting] 052, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    5. Klaus Schmidt-Hebbel, 2019. "Macroeconomic Institutions: Lessons from World Experience for MENA Countries," Working Papers 1311, Economic Research Forum, revised 21 Aug 2019.
    6. Efthyvoulou, Georgios, 2011. "Political cycles under external economic constraints: Evidence from Cyprus," Journal of Economics and Business, Elsevier, vol. 63(6), pages 638-662.

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