Institutional Framework of Central Bank Independence: Revisited
Institutional Framework of Central Bank Independence: Revisited

Author(s): Jacek Lewkowicz, Rafał Woźniak, Michał Woźniak, Michał Wrzesiński
Subject(s): National Economy, Law on Economics
Published by: Wydawnictwa Uniwersytetu Warszawskiego
Keywords: central bank independence; governance; law and economics
Summary/Abstract: The subject of central bank independence (CBI) and its consequences for monetary policy and economic development has been widely explored in public debate and research discourse. This study contributes to the existing literature on central bank independence by exploring its links with the institutional environment across countries. Our primary focus is on the relevance of de jure provisions for de facto CBI, as well as on the importance of other structural factors. We rely on a dataset consisting of various novel indices to approximate these issues across multiple dimensions and apply advanced panel econometric tools to investigate our research tasks. The outcome of the study implies that the interrelationships between de jure and de facto CBI are observable. Thus, these conclusions may be successfully applied in institutional design and public policies regarding central banking.

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