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Any Link Between Legal Central Bank Independence and Inflation? Evidence from Latin America and the Caribbean

This paper reviews central bank legislation in 24 countries in Latin America and the Caribbean during the 1990s. Using panel regressions, we find a negative relationship between legal central bank independence (CBI) and inflation. This result holds for three alternative measures of CBI and after con...

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Bibliographic Details
Main Author: Jácome, Luis
Other Authors: Vazquez, Francisco
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2005
Series:IMF Working Papers
Subjects:
Macroeconomics
Banks
Central Bank Autonomy
Central Banks And Their Policies
Micro Finance Institutions
Public Finance & Taxation
Structural Reforms
Banks And Banking
Prices
Revenue
Inflation
Taxation, Subsidies, And Revenue: General
Institutions And The Macroeconomy
Legal Support In Revenue Administration
Depository Institutions
Banking
Deflation
Public Finance
Price Level
Mortgages
Ecuador
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper reviews central bank legislation in 24 countries in Latin America and the Caribbean during the 1990s. Using panel regressions, we find a negative relationship between legal central bank independence (CBI) and inflation. This result holds for three alternative measures of CBI and after controlling for international inflation, banking crises, and exchange regimes. The result is also robust to the inclusion of a broader indicator of structural reforms that usually go along with changes in central bank legislation, illustrating the complementary nature of various aspects of economic reform. The paper fails, however, to find a causal relationship running from CBI to inflation
Physical Description:41 pages
ISBN:9781451860948

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