IDEAS home Printed from https://ideas.repec.org/a/agr/journl/v4(637)y2023i4(637)p203-218.html
   My bibliography  Save this article

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 / Editura Economica, vol. 0(4(637), W), pages 203-218, Winter.
    • Handle: RePEc:agr:journl:v:4(637):y:2023:i:4(637):p:203-218
    as

    Download full text from publisher

    File URL: http://store.ectap.ro/articole/1709.pdf
    Download Restriction: no
    File URL: http://www.ectap.ro/articol.php?id=1709&rid=153
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Glick, R. & Moreno, R., 1999. "Money and Credit, Competitiveness, and Currency Crises in Asia and Latin America," Papers 99-01, Economisch Institut voor het Midden en Kleinbedrijf-.
    3. Alicia García Herrero & Pedro del Río, 2003. "Financial stability and the design of monetary policy," Working Papers 0315, Banco de España.
    4. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bagliano, Fabio C. & Morana, Claudio, 2009. "International macroeconomic dynamics: A factor vector autoregressive approach," Economic Modelling, Elsevier, vol. 26(2), pages 432-444, March.
    2. Wang, Juan & Zhang, Dongxiang & Zhang, Jian, 2015. "Mean reversion in stock prices of seven Asian stock markets: Unit root test and stationary test with Fourier functions," International Review of Economics & Finance, Elsevier, vol. 37(C), pages 157-164.
    3. Tolga Omay & Furkan Emirmahmutoğlu, 2017. "The Comparison of Power and Optimization Algorithms on Unit Root Testing with Smooth Transition," Computational Economics, Springer;Society for Computational Economics, vol. 49(4), pages 623-651, April.
    4. İbrahim Özmen & Mihai Mutascu, 2024. "Public Debt and Growth: New Insights," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 8706-8736, June.
    5. Stengos, Thanasis & Yazgan, M. Ege, 2014. "Persistence In Convergence," Macroeconomic Dynamics, Cambridge University Press, vol. 18(4), pages 753-782, June.
    6. Fabio C. Bagliano & Claudio Morana, 2011. "The Effects of the US Economic and Financial Crises on Euro Area Convergence," Chapters, in: Wim Meeusen (ed.), The Economic Crisis and European Integration, chapter 7, Edward Elgar Publishing.
    7. Alan King & Carlyn Ramlogan-Dobson, 2016. "Is there club convergence in Latin America?," Empirical Economics, Springer, vol. 51(3), pages 1011-1031, November.
    8. Amjad Taha & Mucahit Aydin & Taiwo Temitope Lasisi & Festus Victor Bekun & Narayan Sethi, 2023. "Toward a sustainable growth path in Arab economies: an extension of classical growth model," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-24, December.
    9. Claudio, Morana & Giacomo, Sbrana, 2017. "Some Financial Implications of Global Warming: An Empirical Assessment," Working Papers 377, University of Milano-Bicocca, Department of Economics, revised 25 Dec 2017.
    10. Claudio Morana & Giacomo Sbrana, 2017. "Temperature Anomalies, Radiative Forcing and ENSO," Working Papers 2017.09, Fondazione Eni Enrico Mattei.
    11. Berger, Wolfram & Kißmer, Friedrich, 2013. "Central bank independence and financial stability: A tale of perfect harmony?," European Journal of Political Economy, Elsevier, vol. 31(C), pages 109-118.
    12. Angel de la Fuente & Juan Francisco Jimeno, 2004. "The private and fiscal returns to schooling and the effect of public policies on private incentives to invest in education: a general framework and some results for the EU," Working Papers 152, Barcelona School of Economics.
    13. Ambya Ambya & Toto Gunarto & Ernie Hendrawaty & Fajrin Satria Dwi Kesumah & Febryan Kusuma Wisnu, 2020. "Future Natural Gas Price Forecasting Model and Its Policy Implication," International Journal of Energy Economics and Policy, Econjournals, vol. 10(5), pages 64-70.
    14. Morana, Claudio, 2024. "A new macro-financial condition index for the euro area," Econometrics and Statistics, Elsevier, vol. 29(C), pages 64-87.
    15. Pei-Long Shen & Chih-Wei Su & Hsu-Ling Chang, 2013. "Are real GDP levels nonstationary across Central and Eastern European countries?," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(1), pages 99-108, July.
    16. Tsangyao Chang & Tsung-Pao Wu & Rangan Gupta, 2015. "Are house prices in South Africa really nonstationary? Evidence from SPSM-based panel KSS test with a Fourier function," Applied Economics, Taylor & Francis Journals, vol. 47(1), pages 32-53, January.
    17. Eleftherios Giovanis, 2010. "Application of logit model and self‐organizing maps (SOMs) for the prediction of financial crisis periods in US economy," Journal of Financial Economic Policy, Emerald Group Publishing Limited, vol. 2(2), pages 98-125, June.
    18. Oliver D. Babson & Steven B. Kamin, 1999. "The contributions of domestic and external factors to Latin American devaluation crises: an early warning systems approach," International Finance Discussion Papers 645, Board of Governors of the Federal Reserve System (U.S.).
    19. Marc Klau & John Hawkins, 2000. "Measuring potential vulnerabilities in emerging market economies," BIS Working Papers 91, Bank for International Settlements.
    20. BAHMANI-OSKOOEE, Mohsen & Wu, Tsung-Pao, 2017. "Purchasing Power Parity in the 34 OECD Countries: Evidence from Quantile-Based Unit Root Tests with both Smooth and Sharp Breaks," MPRA Paper 81820, University Library of Munich, Germany, revised 07 Feb 2017.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:agr:journl:v:4(637):y:2023:i:4(637):p:203-218. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Mircea Dinu (email available below). General contact details of provider: https://edirc.repec.org/data/agerrea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.