Investigating the Link Between Central Bank Independence and Inflation in Central and Eastern Europe

Bogoev, Jane; Petrevski, Goran; Sergi, Bruno S.

doi:10.2753/eee0012-8775500405

Cited by 11 publications

(10 citation statements)

References 28 publications

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“…One of the pioneering studies for these economies is that of Loungani and Sheets (1997) who investigated the correlation between CBI and inflation in twelve transition countries. They conclude that a higher CBI would improve inflation performance only after the variable of adequate level of liberalization of economy is included into regression (Bogeov et al, 2011). Another study from Alpanda and Honig (2009) who included also emerging countries in their sample found no relationship between CBI and growth.…”

Section: Empirical Studiesmentioning

confidence: 97%

“…However, due to political turmoil that these economies have experienced, the governor has been changed very often which has made the actual indices very high 3 which may indicate governmental instability and not a direct attack to CBI, as a result actual indices are not an accurate proxy for CBI for the countries in our sample (Loungani and Sheets, 1995). Because of this critique the legal indices will be used instead which have been calculated by Bogeov et al (2011) by using the techniques proposed by Grilli et al (1991) and Cukierman et al (1992).…”

Section: Model Specification and Datamentioning

confidence: 99%

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Central bank independence and its effect on money market stability

Alishani¹

2012

IIR

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Since 1990s many countries have moved toward greater central bank independence (CBI) by either amending their Central Bank’s laws or writing them de novo. Also countries of Western Balkans and many other transition countries have moved toward greater CBI. There are many potential benefits associated with greater CBI, and one of them is stable growth of money and liquidity. For a given level of money market development the hypothesis is that a more independent CB is likely to promote more stable growth of money supply (Dželetović et al., 2008). As a result the main research task of this work is to estimate the effects of CBI on money market growth for five Western Balkans countries and five other European transition countries. Because the empirical studies were very limited for the relationship between CBI and money market growth, there were no clear conclusions. In addition, there were different measuring methodologies that attempt to quantify the extent of legal and actual CBI. Related to the main research task, this dissertation has examined the effects of CBI on money market stability (proxied by bank deposit growth) for a sample of 10 countries for a period from 1999-2009 by using fixed effect model. Through this methodology different regressions have been estimated, but the results were not robust and there are no clear finding on the relationship between CBI and money market growth.

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Section: Empirical Studiesmentioning

confidence: 97%

Section: Model Specification and Datamentioning

confidence: 99%

Central bank independence and its effect on money market stability

Alishani¹

2012

IIR

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“…6 Following these pioneering works, studies on former socialist transition economies also started appearing in 1997. They include: Loungani and Sheets (1997), Maliszewski (2000), Cukierman et al (2002), Eijffinger and Stadhouders (2003), Hammermann and Flanagan (2007), Dumiter (2011), Maslowska (2011), Bogoev et al (2012a, Bogoev et al (2012b), and Petrevski et al (2012). Hereinafter, we will especially review studies after Dumiter (2011), which are not covered by Klomp and de Haan (2010).…”

Section: Central Bank Independence and Inflation: Literature Reviewmentioning

confidence: 99%

“…Thus, this paper provides valuable empirical data for examining the heterogeneity among different studies by meta-analysis. Bogoev et al (2012aBogoev et al ( , 2012b and Petrevski et al (2012) are a heterochromatic group of empirical studies because they came to different conclusions regarding the disinflation effect of CBI, despite having been published in the same year by the same group of researchers and having dealt with the same subject. In fact, while Bogoev et al (2012a) reported that "CBI is found to have a statistically significant and economically important negative effect on inflation" (p. 93), Bogoev et al (2012b) 646).…”

Section: Central Bank Independence and Inflation: Literature Reviewmentioning

confidence: 99%

“…Bogoev et al (2012aBogoev et al ( , 2012b and Petrevski et al (2012) are a heterochromatic group of empirical studies because they came to different conclusions regarding the disinflation effect of CBI, despite having been published in the same year by the same group of researchers and having dealt with the same subject. In fact, while Bogoev et al (2012a) reported that "CBI is found to have a statistically significant and economically important negative effect on inflation" (p. 93), Bogoev et al (2012b) 646). We conjecture that the presence of the remarkably different research outcomes is closely related to the differences in study conditions among these papers, including the empirical model, the estimation period, and the target countries.…”

Section: Central Bank Independence and Inflation: Literature Reviewmentioning

confidence: 99%

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Central Bank Independence and Inflation in Transition Economies: A Comparative Meta-Analysis with Developed and Developing Economies

Iwasaki

Uegaki

2017

Eastern European Economics

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This paper aims to evaluate the central bank reforms in Central and Eastern Europe and the former Soviet countries through a comparative meta-analysis between studies of transition economies and those of other developed and developing economies that empirically examined the effect of central bank independence (CBI) on inflation. The results of a meta-synthesis using a total of 282 estimates collected from existing literature indicates that both transition and non-transition studies have successfully identified a negative relationship between CBI and inflation. Moreover, our meta-regression analysis suggested that the choice of estimator, inflation variable type, degree of freedom, and quality level of the study strongly affected the empirical results concerning transition economies. We also found that no significant difference exists between the two types of studies in terms of both effect size and statistical significance so long as we control for the degree of freedom and quality level of the study, implying that the socioeconomic setting of the society has so substantially developed in transition economies that the relation between CBI and its disinflation effect is observed in the same way as in non-transition economies. JEL classification numbers: E31, E58, G18, P24, P34

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Central Bank Independence in Transition Economies

Bogoev¹,

Petrevski²

2015

Palgrave Dictionary of Emerging Markets and Transition Economics

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Investigating the Link Between Central Bank Independence and Inflation in Central and Eastern Europe

Cited by 11 publications

References 28 publications

Central bank independence and its effect on money market stability

Central bank independence and its effect on money market stability

Central Bank Independence and Inflation in Transition Economies: A Comparative Meta-Analysis with Developed and Developing Economies

Central Bank Independence in Transition Economies

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