THE ROLE OF CENTRAL BANK INDEPENDENCE IN PRICE STABILITY
THE ROLE OF CENTRAL BANK INDEPENDENCE IN PRICE STABILITY
This study aims to determine the relationship between inflation and the independence of central banks in post-Soviet, developed, and developing countries. The hypothesis of a negative statistical relationship between the inflation rate and the values of the CWN and GMT central bank independence indices and their constituent subindices for post-Soviet, developed, and developing countries for 2001–2020 was tested. Based on the results of the econometric assessment, the paper finds that high values of the central bank independence indices and their sub-indices help to keep inflation in a certain corridor: if inflation is high, central bank independence reduces it, and if inflation is low, it helps to keep inflation at a low level. The impact of central bank independence on inflation weakens as inflation decreases.
Keywords:
Central Bank Independence, Inflation, CWN and GMT Indices Post-Soviet Countries, Monetary Policy, Central Asia.,
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- ISSN: 2519-2442
- Yayın Aralığı: Yılda 4 Sayı
- Başlangıç: 2019
- Yayıncı: Hoca Ahmet Yesevi Uluslararası Türk-Kazak Üniversitesi
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