IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpep/v2008y2008i3id333p254-275.html
   My bibliography  Save this article

Towards measurement of political pressure on central banks: the case of the central bank of egypt

Author

Listed:
  • Ibrahim L. Awad

Abstract

This paper assesses whether the legal independence granted to the Central Bank of Egypt (CBE) by the latest legislation promulgated in 2005 is factual. The author followed Fry's methodology, which assumes that the level of independence of the central bank is determined by fiscal attributes. In an attempt to develop Fry's method, there was used a simple criterion to assess the central bank's independence, namely, that the central bank is actually independent if it can fulfill its money supply target without squeezing the private sector. Applying this criterion to the case of the CBE, we find that the legal independence granted to the CBE by the latest legislation is not factual.

Suggested Citation

  • Ibrahim L. Awad, 2008. "Towards measurement of political pressure on central banks: the case of the central bank of egypt," Prague Economic Papers, Prague University of Economics and Business, vol. 2008(3), pages 254-275.
    • Handle: RePEc:prg:jnlpep:v:2008:y:2008:i:3:id:333:p:254-275
    DOI: 10.18267/j.pep.333
    as

    Download full text from publisher

    File URL: http://pep.vse.cz/doi/10.18267/j.pep.333.html
    Download Restriction: free of charge
    File URL: http://pep.vse.cz/doi/10.18267/j.pep.333.pdf
    Download Restriction: free of charge
    File URL: https://libkey.io/10.18267/j.pep.333?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Eijffinger, S.C.W., 1993. "Central bank independence in twelve industrial countries," Other publications TiSEM 0401b17a-e2c7-4179-ace9-a, Tilburg University, School of Economics and Management.
    2. Alberto Alesina, 1988. "Macroeconomics and Politics," NBER Chapters, in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62, National Bureau of Economic Research, Inc.
    3. Olivier Blanchard, 2004. "Fiscal Dominance and Inflation Targeting: Lessons from Brazil," NBER Working Papers 10389, National Bureau of Economic Research, Inc.
    4. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-162, May.
    5. Adam Geršl, 2006. "Political Pressure on Central Banks: The Case of the Czech National Bank," Working Papers IES 2006/08, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised Apr 2006.
    6. Georgios Chortareas & Stephen Miller, 2004. "Optimal Central Banker Contracts and Common Agency," Public Choice, Springer, vol. 121(1), pages 131-155, October.
    7. Maier, Philipp & Sturm, Jan-Egbert & de Haan, Jakob, 2002. "Political pressure on the Bundesbank: an empirical investigation using the Havrilesky approach," Journal of Macroeconomics, Elsevier, vol. 24(1), pages 103-123, March.
    8. Jean-François Segalotto & Mr. Marco Arnone & Mr. Bernard J Laurens, 2006. "Measures of Central Bank Autonomy: Empirical Evidence for OECD, Developing, and Emerging Market Economies," IMF Working Papers 2006/228, International Monetary Fund.
    9. Alex Cukierman, 1992. "Central Bank Strategy, Credibility, and Independence: Theory and Evidence," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262031981, April.
    10. Fry, Maxwell J, 1998. "Assessing Central Bank Independence in Developing Countries: Do Actions Speak Louder Than Words?," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 512-529, July.
    11. Adam Geršl, 2006. "Political Pressure on Central Banks: The Case of the Czech National Bank (in English)," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 56(1-2), pages 18-39, January.
    12. Cukierman Alex, 1992. "CENTRAL BANK STRATEGY, CREDIBILITY, AND INDEPENDANCE: THEORY AND EVIDENCE: Compte Rendu par Dominique Cariofillo," Journal des Economistes et des Etudes Humaines, De Gruyter, vol. 3(4), pages 581-590, December.
    13. Mendonça, Helder Ferreira de, 2005. "Central bank independence and its relationship to inflation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    14. Mr. Bernard J Laurens & Mr. Marco Arnone & Jean-François Segalotto, 2006. "The Measurement of Central Bank Autonomy: Survey of Models, Indicators, and Empirical Evidence," IMF Working Papers 2006/227, International Monetary Fund.
    15. Michael Parkin & Robin Bade, 1978. "Central Bank Laws and Monetary Policies: A Preliminary Investigation," University of Western Ontario, Departmental Research Report Series 7804, University of Western Ontario, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibrahim AWAD, 2013. "Challenges For Adopting Inflation Targeting Regime In Egypt," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 11, pages 59-81, June.
    2. Ibrahim L. AWAD, 2008. "Is Egypt Ready to Apply Inflation Targeting Regime?," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 2, pages 141-159, November.
    3. Ibrahim L. Awad, 2010. "Why Has the Central Bank of Egypt Been Unable to Achieve The Goal of Price Stability Under the Economic Reform Program?," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2010(6), pages 27-48.
    4. Ibrahim L. Awad, 2023. "A Comparative Study of Seigniorage: Egypt and Qatar," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 172-190.
    5. Abdel-Baki Monal A., 2012. "Coalitions within the Egyptian Banking Sector: Catalysts of the Popular Revolution," Business and Politics, De Gruyter, vol. 14(1), pages 1-26, April.
    6. Ibrahim L. Awad & Ashraf Galal Eid, 2017. "The Mechanisms of Stagflation in Egypt: The Arab Spring Five Years Later," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 4, pages 129-145.
    7. Ibrahim L. Awad, 2009. "Did Egypt Satisfy Prerequisites for an it Regime?," Acta Oeconomica Pragensia, Prague University of Economics and Business, vol. 2009(6), pages 63-80.

    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. Ibrahim L. Awad, 2008. "Towards measurement of political pressure on central banks in the emerging market economies: the case of the central bank of Egypt," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 1, pages 63-89, December.
    2. Michael Parkin, 2013. "Central Bank Laws and Monetary Policy Outcomes: A Three Decade Perspective," University of Western Ontario, Economic Policy Research Institute Working Papers 20131, University of Western Ontario, Economic Policy Research Institute.
    3. Cukierman, Alex, 2008. "Central bank independence and monetary policymaking institutions -- Past, present and future," European Journal of Political Economy, Elsevier, vol. 24(4), pages 722-736, December.
    4. Andreas Freytag, 2001. "Does central bank independence reflect monetary commitment properly? Methodical considerations," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 54(217), pages 181-208.
    5. Cukierman, Alex & Miller, Geoffrey P. & Neyapti, Bilin, 2002. "Central bank reform, liberalization and inflation in transition economies--an international perspective," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 237-264, March.
    6. Belke, Ansgar & Freytag, Andreas & Keil, Jonas & Schneider, Friedrich, 2014. "The credibility of monetary policy announcements: Empirical evidence for OECD countries since the 1960s," International Review of Economics & Finance, Elsevier, vol. 33(C), pages 217-227.
    7. S. Eijffinger & M. Van Keulen, 1995. "Central bank independence in another eleven countries," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 39-81.
    8. M.A. Jenkins, 1996. "Central bank independence and inflation performance: panacea or placebo?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 49(197), pages 241-270.
    9. Stephanos Papadamou & Moïse Sidiropoulos & Eleftherios Spyromitros, 2016. "Central Bank Independence and the Dynamics of Public Debt?," Working Papers of BETA 2016-15, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    10. Donato Masciandaro & Davide Romelli, 2018. "Beyond the Central Bank Independence Veil: New Evidence," BAFFI CAREFIN Working Papers 1871, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    11. Arnone, Marco & Romelli, Davide, 2013. "Dynamic central bank independence indices and inflation rate: A new empirical exploration," Journal of Financial Stability, Elsevier, vol. 9(3), pages 385-398.
    12. Eijffinger, Sylvester & Schaling, Eric & Hoeberichts, Marco, 1998. "Central bank independence: A sensitivity analysis," European Journal of Political Economy, Elsevier, vol. 14(1), pages 73-88, February.
    13. Stéphane Goutte & David Guerreiro & Bilel Sanhaji & Sophie Saglio & Julien Chevallier, 2019. "International Financial Markets," Post-Print halshs-02183053, HAL.
    14. Andreas Freytag & Friedrich Schneider, 2007. "Monetary Commitment, Institutional Constraints and Inflation: Empirical Evidence for OECD Countries since the 1970s," CESifo Working Paper Series 2001, CESifo.
    15. Ichiro Iwasaki & Akira Uegaki, 2017. "Central Bank Independence and Inflation in Transition Economies: A Comparative Meta-Analysis with Developed and Developing Economies," Eastern European Economics, Taylor & Francis Journals, vol. 55(3), pages 197-235, May.
    16. Stephanos Papadamou & Moïse Sidiropoulos & Eleftherios Spyromitros, 2017. "Is There a Role for Central Bank Independence on Public Debt Dynamics?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 7(1), pages 1-6.
    17. Anita Angelovska - Bezhoska, 2018. "Central bank independence-the case of the National Bank of Republic of Macedonia," Working Papers 2018-01, National Bank of the Republic of North Macedonia.
    18. Jeroen Klomp & Jakob De Haan, 2010. "Inflation And Central Bank Independence: A Meta‐Regression Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 24(4), pages 593-621, September.
    19. Aziz N. Berdiev & James W. Saunoris, 2023. "The case for independence: Does central bank independence curb the spread of the underground economy?," Kyklos, Wiley Blackwell, vol. 76(3), pages 407-435, August.
    20. Mr. Tonny Lybek, 1999. "Central Bank Autonomy, and Inflation and Output Performance in the Baltic States, Russia, and Other Countries of the Former Soviet Union, 1995-1997," IMF Working Papers 1999/004, International Monetary Fund.

    More about this item

    Keywords

    central bank independence; fiscal dominance; political pressure;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

    Statistics

    Access and download statistics

    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:prg:jnlpep:v:2008:y:2008:i:3:id:333:p:254-275. 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: Stanislav Vojir (email available below). General contact details of provider: https://edirc.repec.org/data/uevsecz.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.