Inflation Performance and Constitutional Central Bank Independence : Evidence From Latin America and the Caribbean

Author/Editor:

Eva Gutierrez

Publication Date:

March 1, 2003

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper explores the relationship between the constitutional entrenchment of central bank independence and inflation performance. Empirical studies for developing countries have not found a relationship between central bank independence, proxied by the "de jure" independence established in the central bank law, and inflation. We argue that the constitution is likely to be better enforced than ordinary statutes owing to its higher legal rank. Our empirical analysis finds that in a sample of Latin American and Caribbean countries, those countries that entrench the independence of the central bank in the constitution have a better inflation performance.

Series:

Working Paper No. 03/53

Subject:

English

Publication Date:

March 1, 2003

ISBN/ISSN:

9781451847406/1018-5941

Stock No:

WPIEA0532003

Format:

Paper

Pages:

30

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