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Legal Central Bank Independence and Inflation in Latin America During the 1990s
Author: Mr. Luis Ignacio Jácome
Series:
IMF Working Papers
Volume/Issue:
Volume 2001: Issue 212
Language:
English
Publication Date:
01 Dec 2001
DOI:
https://doi.org/10.5089/9781451874891.001
ISBN:
9781451874891
ISSN:
1018-5941
Pages:
41
Keywords:
WP; central bank independence; interest rate; capital integrity; central bank governor; central bank reform; exchange rate; financial statements; governance body; government paper; inflation; Latin American countries; central bank authority; recording central bank bank operation; government participation; central bank involvement; central bank bank transaction; central bank loss; central bank board of directors; central bank director; Central bank autonomy; Central bank accountability; Central bank legislation; Legal support in revenue administration; Central America
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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This paper reviews central banks’ legal reform in Latin America during the 1990s and discusses the status of central bank independence in the region. Based on this information, it builds a simplified index of central bank independence which, in addition to the commonly used criteria of political and economic independence, incorporates provisions of central banks’ financial autonomy, accountability, and lender-of-last-resort. The paper finds a moderate negative correlation between increased central bank independence and inflation during 1999–2001 in 14 Latin American countries. Dissagregating the index, the same analysis suggests that economic independence is the key component driving the observed negative correlation between legal central bank independence and inflation.
Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund