Abstract
Analyses of central bank independence (CBI) have generated two sets of apparently contradictory results - CBI appears to be both inversely related to inflation and positively related to the rise in unemployment and slowdown in economic growth during disinflations. I suggest that these results may issue from autonomous central banks being associated with sharper, more aggressive disinflations. To test the proposition I use two measures of policy stance, one of which contains more information concerning policymaker's expectations than has heretofore been the case. The results suggest a need to qualify yet further the optimality of CBI.
Publisher
Cambridge University Press (CUP)
Subject
Political Science and International Relations,Industrial relations
Reference74 articles.
1. The average per disinflation is computed from the annual ratio of government debt to GDP, both in national currency units as reported by the OECD. Data source Huber, et al, (1997).
2. Making the Most of Statistical Analyses: Improving Interpretation and Presentation
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