IDEAS home Printed from https://ideas.repec.org/p/mod/depeco/0086.html
   My bibliography  Save this paper

Determinants of Central Bank Independence: a Random Forest Approach

Author

Listed:
  • Maddalena Cavicchioli
  • Angeliki Papana
  • Ariadni Papana Dagiasis
  • Barbara Pistoresi

Abstract

In this paper we implement an efficient non-parametric statistical method, Random survival forests, for the selection of the determinants of Central Bank Independence (CBI) among a large database of political and economic variables for OECD countries. This statistical technique enables us to overcome omitted variables and over omitting problems. It turns out that the economic variables are major determinants compared to the political ones and linear and nonlinear effects of chosen predictors on CBI are found.

Suggested Citation

  • Maddalena Cavicchioli & Angeliki Papana & Ariadni Papana Dagiasis & Barbara Pistoresi, 2016. "Determinants of Central Bank Independence: a Random Forest Approach," Department of Economics 0086, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    • Handle: RePEc:mod:depeco:0086
    as

    Download full text from publisher

    File URL: http://155.185.68.2/wpdemb/0086.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Alesina, Alberto & Stella, Andrea, 2010. "The Politics of Monetary Policy," Handbook of Monetary Economics, in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 18, pages 1001-1054, Elsevier.
    2. Brumm, Harold J., 2011. "Inflation and central bank independence: Two-way causality?," Economics Letters, Elsevier, vol. 111(3), pages 220-222, June.
    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. Masciandaro, Donato, 2022. "Independence, conservatism, and beyond: Monetary policy, central bank governance and central banker preferences (1981–2021)," Journal of International Money and Finance, Elsevier, vol. 122(C).
    2. Masciandaro, Donato & Romelli, Davide, 2015. "Ups and downs of central bank independence from the Great Inflation to the Great Recession: theory, institutions and empirics," Financial History Review, Cambridge University Press, vol. 22(3), pages 259-289, December.
    3. 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.
    4. Donato Masciandaro & Davide Romelli, 2018. "To Be or not to Be a Euro Country? The Behavioural Political Economics of Currency Unions," BAFFI CAREFIN Working Papers 1883, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    5. Donato Masciandaro & Davide Romelli, 2019. "Behavioral Monetary Policymaking: Economics, Political Economy and Psychology," World Scientific Book Chapters, in: Behavioral Finance The Coming of Age, chapter 9, pages 285-329, World Scientific Publishing Co. Pte. Ltd..
    6. Donato Masciandaro, 2021. "Central Bank Governance in Monetary Policy Economics (1981-2020)," BAFFI CAREFIN Working Papers 21153, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    7. Maddalena Cavicchioli & Angeliki Papana & Ariadni Papana Dagiasis & Barbara Pistoresi, 2016. "Determinants of Central Bank Independence: a Random Forest Approach," Center for Economic Research (RECent) 122, University of Modena and Reggio E., Dept. of Economics "Marco Biagi".
    8. Martin, Fernando M., 2015. "Debt, inflation and central bank independence," European Economic Review, Elsevier, vol. 79(C), pages 129-150.
    9. Bernd Hayo & Ummad Mazhar, 2014. "Monetary Policy Committee Transparency: Measurement, Determinants, and Economic Effects," Open Economies Review, Springer, vol. 25(4), pages 739-770, September.
    10. Jamus Jerome Lim, 2021. "The limits of central bank independence for inflation performance," Public Choice, Springer, vol. 186(3), pages 309-335, March.
    11. Donato Masciandaro, 2018. "Central Banks And Macroprudential Policies: Economics And Politics," BAFFI CAREFIN Working Papers 1878, BAFFI CAREFIN, Centre for Applied Research on International Markets Banking Finance and Regulation, Universita' Bocconi, Milano, Italy.
    12. Pasquale Foresti, 2012. "Rules Versus Discretion Under Asymmetric Shocks," Economics Bulletin, AccessEcon, vol. 32(2), pages 1180-1190.
    13. Poomjai Nacaskul & Kritchaya Janjaroen & Suparit Suwanik, 2012. "Economic Rationales for Central Banking: Historical Evolution, Policy Space, Institutional Integrity, and Paradigm Challenges," Working Papers 2012-04, Monetary Policy Group, Bank of Thailand.
    14. Francesco Salsano, 2022. "Monetary policy when the objectives of central bankers are imperfectly observable," Scottish Journal of Political Economy, Scottish Economic Society, vol. 69(4), pages 396-415, September.
    15. Cavoli, Tony & Wilson, John K., 2015. "Corruption, central bank (in)dependence and optimal monetary policy in a simple model," Journal of Policy Modeling, Elsevier, vol. 37(3), pages 501-509.
    16. Mazhar, Ummad & Jafri, Juvaria, 2014. "Does an informal sector reduce the economic dividends of political stability? Empirical evidence," MPRA Paper 60764, University Library of Munich, Germany.
    17. Davide Romelli, 2022. "The political economy of reforms in Central Bank design: evidence from a new dataset," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 37(112), pages 641-688.
    18. Barbara Pistoresi & Maddalena Cavicchioli & Giulio Brevini, 2017. "Central Bank Independence, financial instability and politics: new evidence for OECD and non-OECD countries," Department of Economics 0112, University of Modena and Reggio E., Faculty of Economics "Marco Biagi".
    19. Ricardo Reis, 2013. "Central Bank Design," Journal of Economic Perspectives, American Economic Association, vol. 27(4), pages 17-44, Fall.
    20. Montserrat Ferre & Carolina Manzano, 2012. "Designing the optimal conservativeness of the central bank," Economics Bulletin, AccessEcon, vol. 32(2), pages 1461-1473.

    More about this item

    Keywords

    Central bank independence; political and economic determinants; Random survival forests;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access

    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:mod:depeco:0086. 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: Sara Colombini (email available below). General contact details of provider: https://edirc.repec.org/data/demodit.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.