Does an Independent Central Bank Smooth Exchange Rate Volatility? Evidence from Time-Varying Panel Causality Analysis
Durmuş Çağrı Yıldırım,
Ömer Esen,
Uğur Çınar
Abstract:This paper empirically examines the effect of the central banks independence on exchange rate volatility by using a large data-set for the E7 (7 emerging countries) covering the period 1998-2017. This paper applies the time-varying panel causality analysis to obtain country-based results. The results show that the policy design, with relatively independent central banks, provides supportive results for macroeconomic stability. It is concluded that policies focusing on current problems by ignoring macroeconomic… Show more
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