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What really matters: conservativeness or independence?

Author

Listed:
  • J. DE HAAN

    (University of Groningen)

  • W. KOOI

    (University of Groningen)

Abstract

Contemporary views often support the idea that a high level of central bank independence, together with a clear mandate for it to restrain inflation, are important institutional devices for maintaining price stability. The meaning and policy implications of central bank independence are discussed. Two indicators of central bank independence are tested, and it is shown that 'instrument independence' (the freedom of a central bank to choose its policy means) is important for inflation performance, but other aspects of central bank independence and 'conservativeness' have little or no impact on inflation.

Suggested Citation

  • J. De Haan & W. Kooi, 1997. "What really matters: conservativeness or independence?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(200), pages 23-38.
    • Handle: RePEc:psl:bnlqrr:1997:12
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    References listed on IDEAS

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    Cited by:

    1. Hefeker, Carsten & Zimmer, Blandine, 2011. "The optimal choice of central bank independence and conservatism under uncertainty," Journal of Macroeconomics, Elsevier, vol. 33(4), pages 595-606.
    2. J. De Haan & F. Amtenbrink & S.C.W. Eijffinger, 1999. "Accountability of central banks: aspects and quantification," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 52(209), pages 169-193.
    3. Jakob De Haan & Erik Leertouwer & Erik Meijer & Tom Wansbeek, 2003. "Measuring central bank independence: a latent variables approach," Scottish Journal of Political Economy, Scottish Economic Society, vol. 50(3), pages 326-340, August.
    4. Helge Berger & Ulrich Woitek, "undated". "Does Conservatism Matter? A Time Series Approach to Central Banking," Working Papers 9814, Business School - Economics, University of Glasgow, revised May 1999.
    5. 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.
    6. Carlo Panico & Francesco Purificato, 2012. "The Role of Institutional and Political Factors in the European Debt Crisis," Working Papers wp280, Political Economy Research Institute, University of Massachusetts at Amherst.
    7. C Katseli & A Theofilakou & K Zekente, 2020. "Central Bank Independence and Inflation Preferences: New Empirical Evidence on the Effects of Inflation," Economic Issues Journal Articles, Economic Issues, vol. 25(1), pages 1-29, March.
    8. D. Masciandaro, 2019. "What Bird Is That? Central Banking And Monetary Policy In The Last Forty Years," BAFFI CAREFIN Working Papers 19127, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    9. Bradley Jones & Joel Bowman, 2019. "China's Evolving Monetary Policy Framework in International Context," RBA Research Discussion Papers rdp2019-11, Reserve Bank of Australia.
    10. Carlo Panico & Marco Piccioni, 2016. "Keynes on Central Bank Independence," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2016(118-119-1), pages 190-216.
    11. Franz R. Hahn & Peter Mooslechner, 1999. "Zur Fundierung des Designs des Europäischen Zentralbanksystems," WIFO Monatsberichte (monthly reports), WIFO, vol. 72(1), pages 49-60, January.
    12. Aleksandra A. Maslowska, 2011. "Quest for the Best: How to Measure Central Bank Independence and Show its Relationship with Inflation," Czech Economic Review, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, vol. 5(2), pages 132-161, August.

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    More about this item

    Keywords

    Financial Systems and central banks;

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G20 - Financial Economics - - Financial Institutions and Services - - - General

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