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The purpose of this study is finding the sensitivity of central bank independence measurements on its impact on inflation in Iran. To this aim different measurements of the central bank independence were calculated using the indices of Grilli et al. (1991), Cukierman et al. (1992), Mathew (2006) and Dumiter (2009) for the period 1961-2012 . Although results of correlation between CBI index and inflation shows that there is a negative correlation between all CBI index and inflation, but the estimated results using the Autoregressive Distributed Lag (ARDL) show except for the index of Grilli et al. (1991) other indices have similar short run and long run significant negative effect on the inflation in Iran. So the CBI have the sensitivity to definition. Also, results of estimation shows that there isn’t any significant differences between the impact of Cukierman et al. (1992), Mathew (2006) and Dumiter (2009) index on the inflation. So this indices can be used interchangeably.

Institutions are important to analyze the relationship between deficits and inflation. This study examines whether deficits are inflationary or not in the presence of dependent central bank and fragile financial markets. A panel dataset has been used for eleven Asian countries from 1981 to 2010. Estimation results from system GMM show that deficits are inflationary for selected sample, while inflationary pressure of budget deficits is particularly stronger when financial markets are not fully developed and central banks are not free to follow their goals and objectives.

The ECB might seem to be the most independent central bank in the world. Its statutes were carefully designed to ensure independence and they are enshrined in an international treaty. Yet, while serving many governments may be a protection, it can also act as a constraint on policy decisions. This essay explains how the ECB has faced limits during the Eurozone crisis. First, it had to find ways to circumvent limitations to its essential function of lender in last resort to both banks and governments. Second, the procedure to appoint members of the Executive Board is open to political interferences. Finally, it is not well protected from fiscal dominance. [ABSTRACT FROM AUTHOR]

This study provides empirical analysis to show increasing pressures over the Central Bank of Turkey (CBT) throughout the past decade where the CBT gives into such pressures, despite the Central Bank Law, which ensures tool independence. The study suggests that the relations between the government and the CBT reflect recent political changes where the government increased its control over state institutions, following rising costs of losing office. However, this trend not only has economic costs such as a restricted capacity to achieve price stability and sustainable growth but it also limits horizontal accountability of state institutions. [ABSTRACT FROM AUTHOR]

This article revisits the balancing act between independence and accountability at the European Central Bank (ECB). It contrasts procedural and substantive concepts of accountability, and challenges the mainstream idea that independence and accountability can be reconciled through narrow mandates, the indiscriminate increase of transparency, the creation of multiple channels of accountability, and the active use of judicial review. These assumptions form the pillars of a procedural type of accountability that promises to resolve the independence/accountability dilemma but fails to do so in practice. The article brings evidence to show how ECB accountability has become a complex administrative exercise that focuses on the procedural steps leading up to monetary and supervisory decisions while simultaneously limiting substantive accountability. The failure to acknowledge the trade‐off between independence and accountability (said to be 'two sides of the same coin') has resulted in a tendency to privilege the former over the latter. [ABSTRACT FROM AUTHOR]

The intellectual justification for modern central banking, time-inconsistency, celebrated its fortieth anniversary in 2017 alongside the Cambridge Journal of Economics. However, the key progeny of the time-inconsistency literature, central bank independence, has fundamental flaws that have been thus far neglected in mainstream research. In the first instance, the argument for independence relies on a utilitarian rather than institutional analysis, one that neglects the genesis of central banks and their relation to other institutions within a country. Second, central bank independence neglects the complex interdependencies of the global monetary and financial system. Applying an institutional lens to the concept of central bank independence, I conclude that 'independence' fails under the reality of globalization as much as it does in a domestic context. With central banks reliant on all manner of political institutions, they are never really independent operationally or in terms of policy. [ABSTRACT FROM AUTHOR]

Deflation presents special challenges to central banking, as traditional monetary policy tools are highly inefficient in dealing with deflationary pressures. In this case, the Federal Reserve must use alternative monetary policy tools that are specially designed to artificially boost asset prices through “printing press” or currency manipulation. Unfortunately, these alternative monetary policy tools create unintended political, geopolitical, and social consequences that overreach into the direct responsibilities of other branches of government. Thus, the government must be able to influence Federal Open Market Committee decisions that potentially affect (or contradict) U.S. foreign policy, U.S. trade policy, U.S. dollar policy, and deliberate domestic/global wealth distribution policies. [ABSTRACT FROM AUTHOR]

Goodhart and Lastra (Open Econ Rev 29:49-68, 2018) lay out the mechanisms through which populist political movements may affect central bank independence. This paper provides the first empirical evidence that one aspect commonly attributed to populism, namely national identity politics, has indeed negatively impacted on central bank independence in developing countries. Combining existing datasets on central bank independence and political variables in developing countries, panel regressions are run for a sample of 113 countries during 1975-2012. Results prove robust to various specifications and macroeconomic as well as institutional control variables. [ABSTRACT FROM AUTHOR]

This paper explores the association of both central bank independence (CBI) and financial market development with the economic performance of Turkey together with six former centrally planned former Soviet Union countries located in Caucasus and Central Asia (CCA countries). First, we construct a legal independence index (LVAW) for central banks. Then, we analyze the relationship between central bank independence and macroeconomic variables. Our findings suggest that there is a positive correlation between central bank independence and GDP growth, whereas the sign of correlation between CBI and GDP deflator is negative. Besides, the economies with higher level of financial deepening are also associated with high CBI. [ABSTRACT FROM AUTHOR]

This research intends to introduce a pattern for independence of Central Bank of Islamic Republic of Iran based on organizational health. The research was conducted through a descriptive-survey method. The samples included 140 people of the elite Central Bank experts and managers. These samples were selected by means of a simple random sampling procedure. The pertaining data was gathered by valid researcher-made questionnaires used for assessing the variable for organizational independence and organizational health of the Central Bank. For data analysis, confirmatory factor analysis and structural model were used for synchronous relations of the components and one-sample average test was utilized for investigating the variables. The components of Central Bank independence, functional and legal independence, staff independence and financial independence are based on Mervin King's research (2012) and organizational health is based on Khodayari et al., (2017). Generally, in the main hypothesis, independence of the Central Bank along with organizational health had significant factor loads in the experts' viewpoint. The results indicate that the basic levels of organizational health including fundamental level, structural-cultural levels, and executive levels significantly influence the organizational independence of the Central Bank according to which a suitable model has been designed for the Central Bank's stasis in organizational decisions. [ABSTRACT FROM AUTHOR]

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This paper discusses whether central bank independence (CBI) has changed since the financial crisis. Central banks’ quasi-fiscal policies during and after the crisis, and macro-prudential and unconventional monetary policies, which are more redistributive than traditional monetary policy, have led to questions about the desirability of CBI. Some even argue that CBI is under threat. However, a survey among central bankers and updates of legal proxies for CBI do not provide strong evidence that CBI has diminished since the financial crisis. The only indication for this is the increase in the turnover rate of central bank governors in advanced countries. [ABSTRACT FROM AUTHOR]

Following the 2007–09 Global Financial Crisis many countries have changed their financial supervisory architecture by increasing the involvement of central banks in supervision. This has led many scholars to argue that financial crises are an important driver in explaining the evolution of the role of central banks as supervisors. We formally test this hypothesis employing a new database that captures the full set of supervisory reforms implemented during the period 1996-2013 in a large sample of countries. Our findings support the view that systemic banking crises are important drivers of reforms in supervisory structure. However, we also highlight an equally important peer effect, namely a tendency of countries to reform their financial supervisory architecture when others do so as well. We construct several measures of spatial spillover effects and show that they can explain institutional similarities among countries and impact the probability of reforming the role of the central bank in financial sector supervision. [ABSTRACT FROM AUTHOR]

Since the 2000s, the Federal Reserve has been following in the shadow of the Bank of Japan by mimicking its policies. But the Fed has been no more successful with those policies. We briefly present the recent history of monetary policy in the United States and Japan and analyze the consequences. In both countries, it is impossible to consider monetary policy in isolation, so we examine the fiscal and regulatory situations. We also address central bank independence in both countries and explain why its significance is overrated. [ABSTRACT FROM AUTHOR]

In this issue, we present a symposium that considers a possible monetary future. Each article is grounded in reality and history, but also considers current trends and the possible future evolution of monetary institutions. England and Fratrik present an overview of bitcoin and its possible development as either a financial asset or money. Luther focuses on the theoretical question of what the source of value for bitcoin is. It turns out to be a tricky one. Cargill and O'Driscoll argue that the Federal Reserve has been following the Bank of Japan's monetary policy, with equally unsatisfactory results. They suggest some remedies. [ABSTRACT FROM AUTHOR]

This paper investigates political pressure from incumbent Presidents and Congress on US monetary policy during the period that Greenspan was the chairman of the Federal Reserve. We propose an expectations-augmented Taylor rule in which we replace realized values with expectations, and use the unemployment gap instead of the output gap. We apply a state-space framework that allows the use of mixed frequency data. Our findings suggest that the Federal Reserve under Greenspan did not create election driven cycles, but also did not strictly follow the Taylor rule. The deviations from the Taylor rule are not driven by partisan politics, but are rooted in the expected economic conditions. [ABSTRACT FROM AUTHOR]