Measuring the Independence of Central Banks and Its Effect on Policy Outcomes |
| |
| Authors: | Cukierman, Alex Web, Steven B. Neyapti, Bilin |
| |
| Affiliation: | Alex Cukierman is with the Department of Economics, Tel Aviv University; Steven B. Webb is with the Country Economics Department at the World Bank; and Bilin Neyapti is with the Country Economics Department at the World Bank and the Economics Department, University of Maryland |
| |
| Abstract: | Making the central bank an agency with the mandate and reputationfor maintaining price stability is a means by which a governmentcan choose the strength of its commitment to price stability.This article develops four measures of central bank independenceand explores their relation with inflation outcomes. An aggregatelegal index is developed for four decades in 72 countries. Threeindicators of actual independence are developed: the rate ofturnover of central bank governors, an index based on a questionnaireanswered by specialists in 23 countries, and an aggregationof the legal index and the rate of turnover. Legal independence is inversely related to inflation in industrial,but not in developing, countries. In developing countries theactual frequency of change of the chief executive officer ofthe bank is a better proxy for central bank independence. Aninflation-based index of overall central bank independence contributessignificantly to explaining cross-country variations in therate of inflation. |
| |
| Keywords: | |
| 本文献已被 Oxford 等数据库收录！ |
|
