umu.sePublications
Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Determinants and Effects of Central Bank Independence Reforms
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Högskolan Dalarna.
2013 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This thesis consists of four empirically oriented papers on central bank independence (CBI) reforms.   

Paper [1] is an investigation of why politicians around the world have chosen to give up power to independent central banks, thereby reducing their ability to control the economy. A new data-set, including the possible occurrence of CBI-reforms in 132 countries during 1980-2005, was collected. Politicians in non-OECD countries were more likely to delegate power to independent central banks if their country had been characterized by high variability in inflation and if they faced a high probability of being replaced. No such effects were found for OECD countries.   

Paper [2], using a difference-in-difference approach, studies whether CBI reform matters for inflation performance. The analysis is based on a dataset including the possible occurrence of CBI-reforms in 132 countries during the period of 1980-2005. CBI reform is found to have contributed to bringing down inflation in high-inflation countries, but it seems unrelated to inflation performance in low-inflation countries.   

Paper [3] investigates whether CBI-reforms are important in reducing inflation and maintaining price stability, using a random-effects random-coefficients model to account for heterogeneity in the effects of CBI-reforms on inflation. CBI-reforms are found to have reduced inflation on average by 3.31 percent, but the effect is only present when countries with historically high inflation rates are included in the sample. Countries with more modest inflation rates have achieved low inflation without institutional reforms that grant central banks more independence, thus undermining the time-inconsistency theory case for CBI. There is furthermore no evidence that CBI-reforms have contributed to lower inflation variability   

Paper [4] studies the relationship between CBI and a suggested trade-off between price variability and output variability using data on CBI-levels, and data the on implementation dates of CBI-reforms. The results question the existence of such a trade-off, but indicate that there may still be potential gains in stabilization policy from CBI-reforms.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2013. , 33 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 869
Keyword [en]
Monetary policy, institutional reform, central banking, price stability, political economy, delegation, institutional economics, inflation, time-inconsistency, accountability
National Category
Economics
Research subject
Economics
Identifiers
URN: urn:nbn:se:umu:diva-83984ISBN: 978-91-7459-768-4 (print)OAI: oai:DiVA.org:umu-83984DiVA: diva2:678363
Public defence
2014-01-24, Samhällsvetarhuset, sal S 205 h, Umeå universitet, Umeå, 13:15 (English)
Opponent
Supervisors
Available from: 2013-12-16 Created: 2013-12-11 Last updated: 2013-12-16Bibliographically approved
List of papers
1. Why do politicians implement central bank independence reforms?
Open this publication in new window or tab >>Why do politicians implement central bank independence reforms?
2013 (English)In: Atlantic Economic Journal, ISSN 0197-4254, E-ISSN 1573-9678, Vol. 41, no 4, 427-438 p.Article in journal (Refereed) Published
Abstract [en]

The purpose of this paper is to investigate why politicians around the world have chosen to give up power to independent central banks, thereby reducing their ability to fine-tune the economy. A new data-set covering 132 countries, of which 86 countries had implemented such reforms, was collected. Politicians in non-OECD countries were more likely to delegate power to independent central banks if their country has been characterized by a high variability in historical inflation and if they faced a high probability of being replaced. No such effects were found for OECD countries.

Keyword
Inflation, Institutional reforms, Monetary policy, Time-inconsistency
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-83980 (URN)10.1007/s11293-013-9391-1 (DOI)2-s2.0-84888307665 (Scopus ID)
Available from: 2013-12-11 Created: 2013-12-11 Last updated: 2017-12-06Bibliographically approved
2. Do Central Bank Independence Reforms Matter for Inflation Performance?
Open this publication in new window or tab >>Do Central Bank Independence Reforms Matter for Inflation Performance?
2011 (English)In: International Journal of Banking, Accounting and Finance, ISSN 1755-3830, E-ISSN 1755-3849, Vol. 3, no 4, 320-335 p.Article in journal (Refereed) Published
Abstract [en]

A difference-in-difference approach was used to investigate whether central bank independence (CBI) reforms matter for inflation, based on a novel dataset including the possible occurrence of such reforms in 132 countries during the period 1980 to 2005. CBI-reforms are found to have contributed to bringing down high inflation rates where those existed, but they seem unrelated to performance in low-inflation countries.

Place, publisher, year, edition, pages
InderScience Publishers, 2011
Keyword
monetary policy, institutional reforms, central banking, price stability, political economy, delegation, central bank independence, banking reforms, inflation performance
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-83981 (URN)10.1504/IJBAAF.2011.043700 (DOI)
Note

Biographical notes: Mats Landström is associated with the Department of Business and Economic Studies, University of Gävle. His research concerns empirical macroeconomics.

Available from: 2013-12-11 Created: 2013-12-11 Last updated: 2017-12-06Bibliographically approved
3. Are Central Bank Independence Reforms Necessary for Achieving Low and Stable Inflation?
Open this publication in new window or tab >>Are Central Bank Independence Reforms Necessary for Achieving Low and Stable Inflation?
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Using data on the occurence of central bank independence (CBI) reforms in 131 countries during 1980-2005, we test whether they were important in reducing inflation and maintaining price stability. CBI reforms are found to have reduced inflation on average 3.31% when countries with historically high inflation rates are included. But countries with lower inflation have reduced it without institutional reforms granting central banks more independence, undermining the theoretical time-inconsistency case for CBI. There is furthermore no evidence that CBI reforms have helped reduce inflation variability.

National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-83982 (URN)
Available from: 2013-12-11 Created: 2013-12-11 Last updated: 2013-12-12Bibliographically approved
4. Central Bank Independence and the Price-Output-Variability Trade-off
Open this publication in new window or tab >>Central Bank Independence and the Price-Output-Variability Trade-off
(English)Manuscript (preprint) (Other academic)
Abstract [en]

Data on central bank independence (CBI) and implementation dates of CBI-reforms were used to investigate the relationship between CBI and a possible trade-off between inflation variability and output variability. No such trade-off was found, but there might still be stabilization gains from CBI-reform.

National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-83983 (URN)
Available from: 2013-12-11 Created: 2013-12-11 Last updated: 2013-12-12Bibliographically approved

Open Access in DiVA

fulltext(1110 kB)1360 downloads
File information
File name FULLTEXT03.pdfFile size 1110 kBChecksum SHA-512
d61988cdacceff4e80ce91b133aebaadf01f921b61138b2bfb41908e25c2eeef9cf53f518ee531c2c8d66123d91a44d3bedef75b45080217552818232066b490
Type fulltextMimetype application/pdf
spikblad(42 kB)16 downloads
File information
File name SPIKBLAD01.pdfFile size 42 kBChecksum SHA-512
ac2aac02b27c1b73ef01579c17281cbe48636b17ab4c0c7ebe0a60837eaa796f8e8e7a6b60de00baefc9e0921f54a91af2695ceb49c44f9344c727b4e17672cc
Type spikbladMimetype application/pdf

Search in DiVA

By author/editor
Landström, Mats
By organisation
Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 1360 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

isbn
urn-nbn

Altmetric score

isbn
urn-nbn
Total: 1981 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf