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An Empirical Observation on Central Bank Independence and Real Output

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  • Thomas Jordan

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Abstract

This note reviews the relation between central bank independence and real output for the 1970s and 1980s. A new statistic, based on the total amount of real output available in a decade, is proposed in order to broaden the analysis of the impact of central bank independence on real output. The results show that, although there is no correlation between central bank independence and average growth, central bank independence had a significantly negative impact on the sum of real output during the 1980s. For the 1970s, central bank independence had no influence on the total quantity of real output. Copyright Kluwer Academic Publishers 1998

Suggested Citation

  • Thomas Jordan, 1998. "An Empirical Observation on Central Bank Independence and Real Output," Open Economies Review, Springer, vol. 9(3), pages 221-227, July.
  • Handle: RePEc:kap:openec:v:9:y:1998:i:3:p:221-227
    DOI: 10.1023/A:1008264616980
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    References listed on IDEAS

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    1. Helge Berger & Jakob De Haan & Sylvester C.W. Eijffinger, 2001. "Central Bank Independence: An Update of Theory and Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 15(1), pages 3-40, February.
    2. Laurence Ball, 1994. "What Determines the Sacrifice Ratio?," NBER Chapters, in: Monetary Policy, pages 155-193, National Bureau of Economic Research, Inc.
    3. Carl E. Walsh, 1994. "Is there a cost to having an independent central bank?," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue feb4.
    4. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-162, May.
    5. Andreas Fischer, 1996. "Central bank independence and sacrifice ratios," Open Economies Review, Springer, vol. 7(1), pages 5-18, January.
    6. Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 38, pages 195-225.
    7. Carl E. Walsh, 1994. "Central bank independence and the costs of disinflation in the EC," Working Papers in Applied Economic Theory 94-04, Federal Reserve Bank of San Francisco.
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    Cited by:

    1. Jörg Bibow, 2004. "Reflections on the current fashion for central bank independence," Cambridge Journal of Economics, Oxford University Press, vol. 28(4), pages 549-576, July.

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    Keywords

    central bank independence; real output;

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