Monetary Policy and the Rule of Law
The translation of legal independence into actual independence is primarily determined by the rule of law. Inspired by the economic growth literature, where the role of institutions already is incorporated, we introduce Institutional Quality Indicators that can be used as reasonable proxies for the rule of law in a country. This idea can be seen as an important extension of the existing empirical research about the relationship between inflation and the institutional design of monetary institutions. With the rule of law factor we will get a better expression of effective central bank independence. Transition economies like former socialist economies in Europe are interesting candidates for the examination of the relationship between the rate of inflation, central bank reforms and the transition process. Legal Transition Indicators will be used as proxy for the rule of law in these countries. The liberalization process seems to be an important condition for the effectiveness of legal central bank independence. With the Cumulative Liberalization Index we incorporate the liberalization process into our analysis.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
|Date of creation:||Jan 2003|
|Date of revision:|
|Contact details of provider:|| Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ.|
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
|Order Information:|| Email: |
When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:3698. 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: ()
If references are entirely missing, you can add them using this form.