Naslov
Central Bank Independence and Political Influence in Transition Countries,

Autori
Piplica, Damir

Vrsta, podvrsta i kategorija rada
Radovi u zbornicima skupova, cjeloviti rad (in extenso), znanstveni

Izvornik
Sixth International Conference on Enterprise in Transition, in Bol, Croatia, May 26-28, 2005, Faculty of Economics, Split, Croatia, / - Split : Ekonomski fakultet Sveučilišta u Splitu, 2005, 1691-1707

ISBN
953-6024-70-5

Skup
Sixth International Conference on Enterprise in Transition, in Bol, Croatia, May 26-28, 2005, Faculty of Economics, Split, Croatia,

Mjesto i datum
Bol, Hrvatska, 26.05.2005. - 28.05.2005

Vrsta sudjelovanja
Predavanje

Vrsta recenzije
Međunarodna recenzija

Ključne riječi
central bank independence; price stability; political influence; overall independence

Sažetak
More or less every single transition country passed all the way through the phase of very high inflation. Economic theory suggests that an independent central bank can save from harm an economy from unnecessary monetary expansion by facilitating the stabilization process and protecting society from inflationary bias. On the other hand, in a period of ruthless macroeconomic imbalances, this institutional arrangement may not be effective enough to stabilize the economy. It on the whole proposes that control of monetary policy should be taken away from politicians and assigned to a central bank protected from outside political pressures. Central bank independence in the researched countries in transition is a powerful device for protecting price stability. Outside conditionality is important element of the stabilization process. Changes in the legal status of central banks were occurring in all transition countries and they are very significant in explaining the annual inflation rates over time. The autonomy of central bank is not an alternate for other elements of stabilization programs and exerts a sliding pressure on inflation only at the high level of liberalization, after the initial price liberalization shock had been contained. Moreover, in most cases researched here the new central bank laws were enacted after the stabilization program had been introduced. It still may be true that monetary institutions do not really matter for inflation performance, even after the initial stabilization. Granting legal independence to the central bank is a signal that the anti-inflationary consensus has been achieved when the costs of inflation exceed political gains from excessive monetary expansion. A lower inflation just reflects the policy change and not the institutional changes. Obviously, the legal framework is no more than one element of overall central bank independence. The degree of central bank independence is measured by applying the Grilli-Masciandaro-Tabellini (GMT) indices and it is comparatively high in all countries examined.

Izvorni jezik
Engleski

Znanstvena područja
Ekonomija

POVEZANOST RADA