CENTRAL BANK INDEPENDENCE AND PRICE STABILITY UNDER ALTERNATIVE POLITICAL REGIMES: A GLOBAL EVIDENCE

Authors

Afees A. Salisu, University of Pretoria, South AfricaFollow
Elias A. Udeaja, Central Bank of Nigeria, NigeriaFollow
Silva Opuala-Charles, Port Harcourt, NigeriaFollow

Document Type

Article

Abstract

In this paper, we explore the connection between Central Bank Independence (CBI) and inflation under alternative political regimes. We formulate a predictive model that accommodates CBI in the analysis of inflation and thereafter we regroup the countries based on the choice of political regimes as well as the level of development. We find that CBI has a statistically significant and negative effect on inflation in countries adopting full democratic and partial autocratic regimes; but are statistically insignificant in countries operating full autocratic and partial democratic regimes. The results leading to this conclusion are robust to different levels of development.

Recommended Citation

Salisu, Afees A.; Udeaja, Elias A.; and Opuala-Charles, Silva (2022) "CENTRAL BANK INDEPENDENCE AND PRICE STABILITY UNDER ALTERNATIVE POLITICAL REGIMES: A GLOBAL EVIDENCE," Bulletin of Monetary Economics and Banking: Vol. 25: No. 2, Article 2.
DOI: https://doi.org/10.21098/bemp.v25i2.2004
Available at: https://bulletin.bmeb-bi.org/bmeb/vol25/iss2/2

First Page

155

Last Page

172

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

Nigeria

Affiliation

University of Pretoria