UmeŚ Economic Studies, Department of Economics, UmeŚ University
Central Bank Independence and Price Stability: Evidence from 23 OECD-countries
() and Xavier de Luna
Abstract: In this paper, we use a non-parametric regression method
to compare the transition process from high to low inflation with the
implementation dates of central bank independence reforms. In a majority of
the countries, price stability is achieved before more independence is
given to the central bank. This suggests that the credibility of a low
inflation goal can be achieved without institutional reforms which grant
the central bank more independence from the political policymakers.
Keywords: Central bank reform; inflation targeting; monetary policy; non-parametric decomposition; (follow links to similar papers)
JEL-Codes: C14; E52; E58; (follow links to similar papers)
14 pages, September 5, 2002, Revised June 12, 2003
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