Central Bank Independence and Price Stability: Evidence from 23 OECD-countries
In this paper, we use a non-parametric regression method to compare the transition process from high to low inflation with the implementation dates of central bank independence reforms. In a majority of the countries, price stability is achieved before more independence is given to the central bank. This suggests that the credibility of a low inflation goal can be achieved without institutional reforms which grant the central bank more independence from the political policymakers.
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|Date of revision:||12 Jun 2003|
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