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Does Central Bank Independence Smooth the Political Business Cycle in Inflation? Some OECD Evidence
Author(s) -
Hadri Kaddour,
Lockwood Ben,
Maloney John
Publication year - 1998
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00113
Subject(s) - independence (probability theory) , economics , inflation (cosmology) , central bank , politics , business cycle , monetary economics , work (physics) , monetary policy , inflation targeting , macroeconomics , keynesian economics , political science , physics , mathematics , mechanical engineering , statistics , theoretical physics , law , engineering
In this paper, electoral and partisan effects in inflation are identified for 18 OECD countries via regression analysis, building on the work of Alesina, Cohen and Roubini. The correlation of the size of these effects across countries with the level of central bank independence is investigated; the results suggest a negative correlation.