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The effect of central bank independence on financial stability in developed countries: evidence from the Fourier procedure

Author

Listed:
  • Canan SANCAR

    (Gümüşhane Üniversitesi, Gümüşhane, Türkiye)

  • Yusuf Ekrem AKBAŞ

    (Adıyaman Üniversitesi, Adıyaman, Türkiye)

  • Esra CAN

    (Adıyaman Üniversitesi, Adıyaman, Türkiye)

  • Beyhan KILINÇER

    (Adıyaman Üniversitesi, Adıyaman, Türkiye)

Abstract

In this study, it is analysed whether central bank independence or real effective exchange rate, international reserves, credits, and current account deficit are effective on financial stability in 9 developed countries between the period of 1996-2017. The Fourier procedure is applied for analysis. As a result of the analysis, it is concluded that central bank independence is not effective on financial stability. Also, it is determined that credit volume negatively affects financial stability while international reserves positively affect it.

Suggested Citation

  • Canan SANCAR & Yusuf Ekrem AKBAŞ & Esra CAN & Beyhan KILINÇER, 2023. "The effect of central bank independence on financial stability in developed countries: evidence from the Fourier procedure," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(637), W), pages 203-218, Winter.
    • Handle: RePEc:agr:journl:v:4(637):y:2023:i:4(637):p:203-218
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    References listed on IDEAS

    as
    1. Alicia García Herrero & Pedro del Río, 2003. "Financial stability and the design of monetary policy," Working Papers 0315, Banco de España.
    2. BADEA Irina-Raluca, 2016. "The Role Of The Z-Score Model In Assessing Financial Stability. Evidence From The Commercial Banks Listed On Bucharest Stock Exchange," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 68(2), pages 188-200, September.
    3. Ralf Becker & Walter Enders & Junsoo Lee, 2006. "A Stationarity Test in the Presence of an Unknown Number of Smooth Breaks," Journal of Time Series Analysis, Wiley Blackwell, vol. 27(3), pages 381-409, May.
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