Central Bank Independence – The Case of the Central Bank of Montenegro

Radović, Milivoje; Radonjić, Milena; Djuraskovic, Jovan

doi:10.2478/jcbtp-2018-0021

Cited by 9 publications

(7 citation statements)

References 25 publications

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“…More so, the independence of central banks in achieving price stability has been an issue of intense debate in previous studies (e.g. Mas et al, 2020;Radovic, Radonjic, Djuraskovic, 2018;Dedu, Stoica, 2012). The first view, the monetarist/classical view, assumes that inflation is fundamentally a monetary phenomenon (Friedman, 1970).…”

Section: Public Debt and Inflation: A Review Of Literaturementioning

confidence: 99%

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

Saungweme

Odhiambo

2021

Croatian Review of Economic, Business and Social Statistics

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The study seeks to empirically test the hypothesis that public debt has a significant influence on inflation in Zimbabwe, covering the period 1980-2020. The study was motivated by recent trends in public debt and domestic inflation in Zimbabwe, and the need to guide debt-inflation related policy. These latest trends have started to ring alarming bells, which raises questions on the effectiveness of fiscal and monetary policies in bringing macroeconomic stability in the country. Applying the Autoregressive Distributed Lag (ARDL) bounds testing procedure to cointegration and an error correction mechanism (ECM), expanded by incorporating structural breaks, the study finds evidence in support of positive and significant impact of public debt on inflation dynamics in Zimbabwe, particularly in the long run. Based on the findings, public debt dynamics matter for inflation process in Zimbabwe. That is, fiscal policy can be considered to be an important determinant of the effectiveness of monetary policy in Zimbabwe. Therefore, the government should be mindful of increases in public debt as this was found to be inflationary.

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Section: Public Debt and Inflation: A Review Of Literaturementioning

confidence: 99%

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

Saungweme

Odhiambo

2021

Croatian Review of Economic, Business and Social Statistics

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“…A policymaker's imperfect control of money, changing objectives, and an incentive to maintain some degree of ambiguity can be the reasons behind imperfect credibility. On the other hand, central bank independence helps the central bank to keep its promise about inflation targets by facilitating to determine objectives and instruments for monetary policy implementation, without the influence of the government or another institution or individual (Radović, Radonjić, & Đurašković, 2018).…”

Section: Introductionmentioning

confidence: 99%

Does Monetary Policy Credibility Help in Anchoring Inflation Expectations? Evidence from Six Inflation Targeting Emerging Economies

Güler

2021

Journal of Central Banking Theory and Practice

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Most emerging market central banks have adopted inflation targeting as their monetary policy system. The heart of inflation targeting system is inflation expectations. The success of a central bank in achieving targets depends on to the extent to which inflation expectations are formed by the announced targets. As the credibility of the central bank increases, its ability to affect the public expectation also increases. The public adjusts its inflation expectations based on announced inflation target only in case of that they believe that the central bank has the sufficiency to reach the inflation target. Credibility enables expectation to be formed in a forward-looking way by weakening its connection with the past. This study aims to contribute to the literature concerning the effects of credibility on monetary policy. For this purpose, using data of six emerging inflation targeting economies (Turkey, Brazil, the Czech Republic, Chile, Poland, and South Africa), the empirical tests were carried out in order to understand the effect of the credibility on the behaviour of inflation expectation in emerging economies. The findings denote that credibility is quite relevant to reduce inflation expectations and contributes to the strength of inflation targets being an anchor for inflation expectations.

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“…The process of granting autonomy to the central banks initiated during the high inflation episodes of 1970’s and early 1980’s (Fischer, 1995; Radovic et al, 2018). The idea of central bank independence was extensively deliberated by new classical economists as a panacea to curb the inflation and inflationary tendencies in economy (Mangano, 1998; Rogoff, 1985; Romelli, 2017).…”

Section: Introductionmentioning

confidence: 99%

“…Political authorities guide monetary policy on the basis of election timings, keeping it more expansionary during last years in office for appeasement & strengthening vote base and more restrictive after the election result is announced (Alesina, 1989; Chaudhuri, 2018; Hibbs, 1987; Nordhaus 1975; Templeman, 2008). Such an alteration to monetary policy at the will of politicians lead to the problem of dynamic inconsistency 2 and eventual loss of credibility in the public institution (Barro & Gordon, 1983; Bezhoska, 2017; Radovic et al, 2018). In view of the fact that problem of inflation bias and less credibility stemmed from a discretionary monetary policy, a solution has been offered to overcome these issues by delegating monetary responsibility to a non-political independent central bank (Barro & Gordon, 1983; Svensson, 1997; Rogoff, 1985).…”

Section: Introductionmentioning

confidence: 99%

Central Bank Independence: A Pseudo de Facto Case of Reserve Bank of India

Bhat

Khan

2021

Asia-Pacific Journal of Management Research and Innovation

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The trend of studies dealing with the correlation between central bank independence and inflation rose to prominence in the last twentieth century, 1980’s. These phenomena lead to development of certain empirical indices for measuring CBI across the countries. This study tries to evaluate the central bank independence in India using the index modelled on the lines of Jasmine Mona and Talla with minor modification regarding price stability objective. The study covers the time period from 1990–1991 till 2018–2019. The results found were that CBI has in India has more or less increased but improved significantly since the adoption of inflation targeting and formation of monetary policy committee post 2016.

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Central Bank Independence – The Case of the Central Bank of Montenegro

Cited by 9 publications

References 25 publications

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

Public debt and inflation dynamics: Empirical evidence from Zimbabwe

Does Monetary Policy Credibility Help in Anchoring Inflation Expectations? Evidence from Six Inflation Targeting Emerging Economies

Central Bank Independence: A Pseudo de Facto Case of Reserve Bank of India

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