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Political institutions and central bank independence revisited

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  • B. Pistoresi
  • F. Salsano
  • D. Ferrari

Abstract

We build on earlier studies regarding Central Bank Independence (CBI) by relating it to political, institutional and economic variables. The data suggest that CBI is positively related to the presence of federalism, the features of the electoral system and parties, the correlation between the shocks to the level of economic activity in the countries included in the sample and, for a sub-sample of economies, the convergence criteria to join the European Monetary Union (EMU).

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  • B. Pistoresi & F. Salsano & D. Ferrari, 2011. "Political institutions and central bank independence revisited," Applied Economics Letters, Taylor & Francis Journals, vol. 18(7), pages 679-682.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:7:p:679-682
    DOI: 10.1080/13504851.2010.485923
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    1. Cukierman, Alex, 2008. "Central bank independence and monetary policymaking institutions -- Past, present and future," European Journal of Political Economy, Elsevier, vol. 24(4), pages 722-736, December.
    2. Adam S. Posen, 1995. "Declarations Are Not Enough: Financial Sector Sources of Central Bank Independence," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 253-274, National Bureau of Economic Research, Inc.
    3. D'Amato, Marcello & Martina, Riccardo, 2005. "Credibility and commitment of monetary policy in open economies," European Journal of Political Economy, Elsevier, vol. 21(4), pages 872-902, December.
    4. Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, December.
    5. Kenneth Rogoff, 1985. "The Optimal Degree of Commitment to an Intermediate Monetary Target," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(4), pages 1169-1189.
    6. Moser, Peter, 1999. "Checks and balances, and the supply of central bank independence," European Economic Review, Elsevier, vol. 43(8), pages 1569-1593, August.
    7. Cukierman Alex, 1992. "CENTRAL BANK STRATEGY, CREDIBILITY, AND INDEPENDANCE: THEORY AND EVIDENCE: Compte Rendu par Dominique Cariofillo," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 3(4), pages 581-590, December.
    8. Farvaque, Etienne, 2002. "Political determinants of central bank independence," Economics Letters, Elsevier, vol. 77(1), pages 131-135, September.
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    Cited by:

    1. de Haan, J. & Eijffinger, Sylvester, 2016. "The Politics of Central Bank Independence," Discussion Paper 2016-047, Tilburg University, Center for Economic Research.
    2. Carola Conces Binder, 2021. "Political Pressure on Central Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 53(4), pages 715-744, June.
    3. Alin Marius Andries & Anca Maria Podpiera & Nicu Sprincean, 2022. "Central Bank Independence and Systemic Risk," International Journal of Central Banking, International Journal of Central Banking, vol. 18(1), pages 81-130, March.
    4. repec:zbw:bofitp:2020_013 is not listed on IDEAS
    5. D. Masciandaro, 2019. "What Bird Is That? Central Banking And Monetary Policy In The Last Forty Years," BAFFI CAREFIN Working Papers 19127, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    6. Ning Xu & Jian Hong & Timothy C. G. Fisher, 2016. "Model selection consistency from the perspective of generalization ability and VC theory with an application to Lasso," Papers 1606.00142, arXiv.org.
    7. Pistoresi B. & Cavicchioli M. & Brevini G., 2017. "Central Bank Independence, Financial Instability and Politics: New Evidence for OECD and Non-OECD Countries," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(7), pages 179-188, July.
    8. Barbara Pistoresi & Maddalena Cavicchioli & Giulio Brevini, 2017. "Central Bank Independence, financial instability and politics: new evidence for OECD and non-OECD countries," Department of Economics 0112, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    9. Alin Marius Andries & Anca Maria Podpiera & Nicu Sprincean, 2022. "Central Bank Independence and Systemic Risk," International Journal of Central Banking, International Journal of Central Banking, vol. 18(1), pages 81-130, March.
    10. Ana Carolina Garriga, 2016. "Central Bank Independence in the World: A New Data Set," International Interactions, Taylor & Francis Journals, vol. 42(5), pages 849-868, October.
    11. Barbara Pistoresi & Maddalena Cavicchioli & Giulio Brevini, 2017. "Central Bank Independence, financial instability and politics: new evidence for OECD and non-OECD countries," Center for Economic Research (RECent) 129, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".

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    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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