Inflation Performance and Constitutional Central Bank Independence

Download or read book Inflation Performance and Constitutional Central Bank Independence written by MissEva Gutierrez and published by International Monetary Fund. This book was released on 2003-03-01 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.