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Central Bank Independence and Private Investment in the Developing World
Author(s) -
Pastor, Jr M.,
Maxfield S.
Publication year - 1999
Publication title -
economics and politics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.822
H-Index - 45
eISSN - 1468-0343
pISSN - 0954-1985
DOI - 10.1111/1468-0343.00063
Subject(s) - independence (probability theory) , investment (military) , sample (material) , developing country , central bank , economics , monetary economics , business , international economics , economic growth , political science , monetary policy , politics , statistics , chemistry , mathematics , chromatography , law
We argue that central bank independence (CBI) can raise private investment through signalling commitment to reform and suggest that such an effect might be larger in democracies where CBI can also limit populist access to economic policy‐making. Random effects regressions on private investment behavior in a sample of 20 developing countries support these hypotheses.