Measuring the Degree of Central Bank Independence in Egypt
The past few years have witnessed a trend of increased delegation of authority to central banks. Increasing central bank independence is a recommended strategy for governments to establish a credible commitment to price stability as the final objective of the monetary authority, even at the cost of other objectives that may be more appealing to the political authorities. Existing literature on measuring central bank independence focuses on developed countries where quantifying the independence of central banks is easier, since quantifying the legal charter is sufficient to reflect the degree of central bank independence. However, in developing countries this task is thorny as quantifying the legal charter is often insufficient, since laws are often incomplete, ambiguous, or simply not respected. Thus, quantifying other indicators that reflect actual practice is required to capture any divergence between legal and actual practices. This paper attempts to quantify the degree of independence in the central bank of Egypt (CBE), from both a legal and behavioural context, since its establishment in 1961 until 2004. The study uses four indices in line with the work of Jacome (2001), Cukierman, et al. (1992), and Cukierman and Webb (1995), where each index is designed in such a way to capture a somewhat different aspect of independence. This study captures the discrepancies between the degree of independence conferred to the CBE by law and actual practice. The empirical findings of this paper offers insights about the direction of efforts that should be made to enhance central bank independence which is the key to achieving price stability and the stability of the financial system in general.
|Date of creation:||Dec 2007|
|Contact details of provider:|| Web page: http://mgt.guc.edu.eg/economics/RePEc/guc/|
More information through EDIRC
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.:
- Luis I. Jacome H., 2002.
"Legal Central Bank independence and inflation in Latin America during the 1990s,"
Revista de Análisis del BCB,
Banco Central de Bolivia, vol. 5(1), pages 157-194, June.
- Luis Ignacio Jácome, 2001. "Legal Central Bank Independence and Inflation in Latin America During the 1990s," IMF Working Papers 01/212, International Monetary Fund.
- Cukierman, A., 1996. "The Economics of Central Banking," Discussion Paper 1996-31, Tilburg University, Center for Economic Research.
- 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.
- Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Working Papers in Applied Economic Theory 94-05, Federal Reserve Bank of San Francisco.
- Cukierman, Alex, 1994. "Central Bank Independence and Monetary Control," Economic Journal, Royal Economic Society, vol. 104(427), pages 1437-1448, November.
- 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 1-10, December.
- Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, July.
- S. Eijffinger & M. Van Keulen, 1995. "Central bank independence in another eleven countries," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 39-81.
- S. Eijffinger & M. Van Keulen, 1995. "Central bank independence in another eleven countries," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 39-81.
- Eijffinger, S. & van Keulen, M., 1994. "Central Bank Independence in Another Eleven Countries," Papers 9494, Tilburg - Center for Economic Research.
- Eijffinger, S.C.W. & van Keulen, M., 1994. "Central bank independence in another eleven countries," Discussion Paper 1994-94, Tilburg University, Center for Economic Research.
- Eijffinger, S.C.W. & van Keulen, M., 1995. "Central bank independence in another eleven countries," Other publications TiSEM 32e466b5-7f2a-4856-881a-8, Tilburg University, School of Economics and Management.
- Eijffinger, S. & De Hann, J., 1995. "The Political Economy of Central Bank Independence," Papers 9587, Tilburg - Center for Economic Research.
- Eijffinger, S-C-W & de Haan, J, 1996. "The Political Economy of Central-Bank Independence," Princeton Studies in International Economics 19, International Economics Section, Departement of Economics Princeton University,.
- Clive Briault & Andrew Haldane & Mervyn King, 1996. "Independence and Accountability," Bank of England working papers 49, Bank of England. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:guc:wpaper:4. 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: (Lobna Sameer)
If references are entirely missing, you can add them using this form.