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Investigating the Link Between Central Bank Independence and Inflation in Central and Eastern Europe


  • Jane Bogoev
  • Goran Petrevski
  • Bruno S. Sergi


This paper investigates the relationship between central bank independence (CBI) and inflation by using two different CBI measures in seventeen transition economies from Central and Eastern Europe from 1990 to 2009. It employs a fixed effects panel data model, which incorporates several control variables and accounts for possible autocorrelation in the residuals. The main finding of our empirical research is that central bank independence is negatively associated with inflation, even after controlling for the effects of other macroeconomic and institutional variables, such as the overall progress of liberalization. These results are broadly in line with the previous empirical findings in the literature.

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  • Jane Bogoev & Goran Petrevski & Bruno S. Sergi, 2012. "Investigating the Link Between Central Bank Independence and Inflation in Central and Eastern Europe," Eastern European Economics, Taylor & Francis Journals, vol. 50(4), pages 78-96, July.
  • Handle: RePEc:mes:eaeuec:v:50:y:2012:i:4:p:78-96

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    References listed on IDEAS

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    22. repec:hrv:faseco:34721963 is not listed on IDEAS
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    Cited by:

    1. Ichiro Iwasaki & Akira Uegaki, 2017. "Central Bank Independence and Inflation in Transition Economies: A Comparative Meta-Analysis with Developed and Developing Economies," Eastern European Economics, Taylor & Francis Journals, vol. 55(3), pages 197-235, May.
    2. Popescu Iulian Vasile, 2013. "The Independence Of Central Banks In Central And Eastern Europe-A Monetary Policy Strategy Based Approach," Annals - Economy Series, Constantin Brancusi University, Faculty of Economics, vol. 3, pages 158-172, June.
    3. Aleksandra Halka & Grzegorz Szafrański, 2014. "What common factors are driving inflation in CEE countries?," EcoMod2014 6977, EcoMod.

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