Quest for the Best: How to Measure Central Bank Independence and Show its Relationship with Inflation
The objective of this paper is to check measures for explanatory power of central bank independence (CBI) in a series of econometric tests. Measures of central bank autonomy offer a useful expression of the extent to which a central bank is able to keep the government away from influencing a change in the inflation rate. The more a measure represents this idea, the easier one can find a relation between the CBI value and the inflation rate. Results of estimations show that proxies by Grilli et al. (1991) are strong regressors of inflation rate, contrary to those by Cukierman et al. (1992). Moreover, estimation results challenge the belief that divergences in CBI-inflation rate estimations are due to differences in institutional features across samples of countries, not to differences in legal proxies of central bank independence. Already results from a homogenous group of industrial countries indicate that some indices perform “better” than others.
Volume (Year): 5 (2011)
Issue (Month): 2 (August)
|Contact details of provider:|| Postal: |
Phone: +420 2 222112330
Fax: +420 2 22112304
Web page: http://ies.fsv.cuni.cz/
More information through EDIRC
|Order Information:|| Web: http://auco.cuni.cz/ Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mangano, Gabriel, 1998. "Measuring Central Bank Independence: A Tale of Subjectivity and of Its Consequences," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 468-92, July.
- Krause, Stefan & Méndez, Fabio, 2008.
"Institutions, arrangements and preferences for inflation stability: Evidence and lessons from a panel data analysis,"
Journal of Macroeconomics,
Elsevier, vol. 30(1), pages 282-307, March.
- Stefan Krause & Fabio Mendez, 2005. "Institutions, Arrangements, and Preferences for Inflation Stability: Evidence and Lessons from a Panel Data Analysis," Emory Economics 0501, Department of Economics, Emory University (Atlanta).
- J. De Haan & W. Kooi, 1997.
"What really matters: conservativeness or independence?,"
Banca Nazionale del Lavoro Quarterly Review,
Banca Nazionale del Lavoro, vol. 50(200), pages 23-38.
- J. De Haan & W. Kooi, 1997. "What really matters: conservativeness or independence?," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 50(200), pages 23-38.
- Marta Campillo & Jeffrey A. Miron, 1996.
"Why Does Inflation Differ Across Countries?,"
NBER Working Papers
5540, National Bureau of Economic Research, Inc.
- Cukierman, Alex & Miller, Geoffrey & Neyapti, Bilin, 2001.
"Central Bank Reform, Liberalization and Inflation in Transition Economies - An International Perspective,"
CEPR Discussion Papers
2808, C.E.P.R. Discussion Papers.
- Cukierman, Alex & Miller, Geoffrey P. & Neyapti, Bilin, 2002. "Central bank reform, liberalization and inflation in transition economies--an international perspective," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 237-264, March.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Reform, Liberalization and Inflation in Transition Economies : An International Perspective," Discussion Paper 2000-106, Tilburg University, Center for Economic Research.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Rerform, Liberalization and Inflation in Transition Economies - an International Perspective," Papers 00-19, Tel Aviv.
- Cukierman, A. & Miller, G.P. & Neyapti, B., 2000. "Central Bank Rerform, Liberalization and Inflation in Transition Economies - an International Perspective," Papers 2000-19, Tel Aviv.
- Brumm, Harold J, 2000. "Inflation and Central Bank Independence: Conventional Wisdom Redux," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 32(4), pages 807-19, November.
- Mizon, Grayham E & Richard, Jean-Francois, 1986. "The Encompassing Principle and Its Application to Testing Non-nested Hypotheses," Econometrica, Econometric Society, vol. 54(3), pages 657-78, May.
- Eijffinger, S.C.W. & Schaling, E. & Hoeberichts, M.M., 1997.
"Central Bank independence : A sensitivity analysis,"
1997-10, Tilburg University, Center for Economic Research.
- Eijffinger, S.C.W. & Schaling, E. & Hoeberichts, M.M., 1997. "Central bank independence : A sensitivity analysis," Other publications TiSEM 59020a3a-1cb8-4e8f-a2b8-5, Tilburg University, School of Economics and Management.
- Eijffinger, S.C.W. & Schaling, E. & Hoeberichts, M.M., 1998. "Central bank independence : A sensitivity analysis," Other publications TiSEM ebcf989c-472b-4d24-b7c2-5, Tilburg University, School of Economics and Management.
- Taylor, John B., 1983. "`Rules, discretion and reputation in a model of monetary policy' by Robert J. Barro and David B. Gordon," Journal of Monetary Economics, Elsevier, vol. 12(1), pages 123-125.
- Luis Jácome & Francisco Vázquez, 2005.
"Any Link Between Legal Central Bank Independence and Inflation? Evidence from Latin America and the Caribbean,"
- Luis Ignacio JÃ¡come & Francisco F. VÃ¡zquez, 2005. "Any Link Between Legal Central Bank Independence and Inflation? Evidence From Latin America and the Caribbean," IMF Working Papers 05/75, International Monetary Fund.
- Jean-FranÃ§ois Segalotto & Marco Arnone & Bernard Laurens, 2006. "Measures of Central Bank Autonomy; Empirical Evidence for OECD, Developing, and Emerging Market Economies," IMF Working Papers 06/228, International Monetary Fund.
- repec:ner:tilbur:urn:nbn:nl:ui:12-76091 is not listed on IDEAS
- Hayo, Bernd, 1998. "Inflation culture, central bank independence and price stability," European Journal of Political Economy, Elsevier, vol. 14(2), pages 241-263, May.
- Andreas Freytag & Donato Masciandaro, 2005. "Financial Supervision Fragmentation and Central Bank Independence: The Two Sides of the Same Coin?," Jenaer Schriften zur Wirtschaftswissenschaft 14/2005, Friedrich-Schiller-Universität Jena, Wirtschaftswissenschaftliche Fakultät.
- Barro, Robert J. & Gordon, David B., 1983.
"Rules, discretion and reputation in a model of monetary policy,"
Journal of Monetary Economics,
Elsevier, vol. 12(1), pages 101-121.
- Robert J. Barro & David B. Gordon, 1983. "Rules, Discretion and Reputation in a Model of Monetary Policy," NBER Working Papers 1079, National Bureau of Economic Research, Inc.
- Peltonen, Tuomas A., 2006. "Are emerging market currency crises predictable? A test," Working Paper Series 0571, European Central Bank.
- Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-98, September.
- repec:tpr:intorg:v:56:y:2002:i:4:p:751-774 is not listed on IDEAS
- Moser, Peter, 1999. "Checks and balances, and the supply of central bank independence," European Economic Review, Elsevier, vol. 43(8), pages 1569-1593, August.
- Alex Cukierman, 1992.
"Central Bank Strategy, Credibility, and Independence: Theory and Evidence,"
MIT Press Books,
The MIT Press,
edition 1, volume 1, number 0262031981, June.
- Cukierman Alex, 1992. "Central Bank Strategy, Credibility, And Independance: Theory And Evidence," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 3(4), pages 10, December.
- Alberto Alesina, 1988. "Macroeconomics and Politics," NBER Chapters, in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62 National Bureau of Economic Research, Inc.
- de Haan, Jakob & van 't Hag, Gert Jan, 1995. " Variation in Central Bank Independence across Countries: Some Provisional Empirical Evidence," Public Choice, Springer, vol. 85(3-4), pages 335-51, December.
When requesting a correction, please mention this item's handle: RePEc:fau:aucocz:au2011_132. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Lenka Stastna)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.