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Inflation Performance and Constitutional Central Bank Independence. Evidence from Latin America and the Caribbean

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  • Eva Gutiérrez

    (Monetary Exchange and Affairs Department, International Monetary Fund)

Abstract

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.

Suggested Citation

  • Eva Gutiérrez, 2004. "Inflation Performance and Constitutional Central Bank Independence. Evidence from Latin America and the Caribbean," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(2), pages 255-287, July-Dece.
    • Handle: RePEc:emc:ecomex:v:13:y:2004:i:2:p:255-287
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    References listed on IDEAS

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