ENGLISH

Central Bank Independence and Transparency: Evolution and Effectiveness

By Christopher W. Crowe; Ellen E. Meade

Book information

Publisher
International Monetary Fund
Year
2008
ISBN
9781451914337, 9781451869798
LCC
HG1811 -- .C769 2008eb
Language
english
Format
EPUB
Filesize
1 MB (1149936 bytes)
Series
IMF Working Papers
Edition
1
Pages
30\0
Time added
2023-08-25 23:45:37
Banks and bankingCentral. ; Autonomy. ; Monetary policy.; BUS069000

Description

This paper examines the current level of central bank independence (CBI) and transparency in a broad sample of countries using newly constructed measures, and looks at the evolution in both measures from an earlier time period. Increases in CBI have tended to occur in more democratic countries and in countries with high levels of past inflation. More independent central banks in turn tend to be more transparent, while transparency is also positively correlated with measures of national institutional quality. Exploiting the time dimension of our data to eliminate country fixed effects and using instrumental variable estimation to overcome endogeneity concerns, we present evidence that greater CBI is associated with lower inflation. We also find that enhanced transparency practices are associated with the private sector making greater use of information provided by the central bank.

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