Political institutions and Central Bank independence: A cross-country analysis

by: Fatholla M Bagheri, Nader Habibi

Public Choice, Vol. 96, No. 1. (1 July 1998), pp. 187-204.

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Abstract

Using three quantitative measures of Central Bank independence, we apply OLS and TSLS regression methods to investigate the possible correlation between political liberty, political instability and central bank independence. For a sample of Western democracies and highly democratic developing countries we show that Cukierman's legal independence index is positively correlated with political freedom and regime political stability. It is negatively correlated with party political stability. For a sample of developing countries that excludes dictatorships we show that a special index of legal central bank autonomy is positively associated with political freedom and political stability. Finally, we observe that, for the same sample of nations, the turnover index of central bank independence is not sensitive to our political variables.

@article{citeulike:2784878, abstract = {Using three quantitative measures of Central Bank independence, we apply OLS and TSLS regression methods to investigate the possible correlation between political liberty, political instability and central bank independence. For a sample of Western democracies and highly democratic developing countries we show that Cukierman's legal independence index is positively correlated with political freedom and regime political stability. It is negatively correlated with party political stability. For a sample of developing countries that excludes dictatorships we show that a special index of legal central bank autonomy is positively associated with political freedom and political stability. Finally, we observe that, for the same sample of nations, the turnover index of central bank independence is not sensitive to our political variables.}, author = {Bagheri, Fatholla M. and Habibi, Nader }, citeulike-article-id = {2784878}, doi = {10.1023/A:1005055317499}, journal = {Public Choice}, keywords = {central-bank, dipl1}, month = {July}, number = {1}, pages = {187--204}, posted-at = {2008-05-11 20:33:00}, priority = {2}, title = {Political institutions and Central Bank independence: A cross-country analysis}, url = {http://dx.doi.org/10.1023/A:1005055317499}, volume = {96}, year = {1998} }

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TY - JOUR ID - citeulike:2784878 L3 - citeulike-article-id:2784878 TI - Political institutions and Central Bank independence: A cross-country analysis JF - Public Choice VL - 96 IS - 1 SP - 187 EP - 204 N2 - Using three quantitative measures of Central Bank independence, we apply OLS and TSLS regression methods to investigate the possible correlation between political liberty, political instability and central bank independence. For a sample of Western democracies and highly democratic developing countries we show that Cukierman's legal independence index is positively correlated with political freedom and regime political stability. It is negatively correlated with party political stability. For a sample of developing countries that excludes dictatorships we show that a special index of legal central bank autonomy is positively associated with political freedom and political stability. Finally, we observe that, for the same sample of nations, the turnover index of central bank independence is not sensitive to our political variables. KW - central-bank KW - dipl1 AU - Bagheri, Fatholla AU - Habibi, Nader PY - 1998/07/01/ UR - http://dx.doi.org/10.1023/A:1005055317499 ER -

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