Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/109085
Authors: 
Berggren, Niclas
Daunfeldt, Sven-Olov
Hellström, Jörgen
Year of Publication: 
2015
Series/Report no.: 
IFN Working Paper 1053
Abstract: 
Many countries have undertaken central-bank independence reforms, but the years of implementation differ. What explains such differences in timing? This is of interest more broadly, as it sheds light on factors that matter for the speed at which economic reforms come about. We study a rich set of potential determinants, both economic and political, but put special focus on a cultural factor, social trust. We find empirical support for an inverse u-shape: Countries with low and high social trust implemented their reforms earlier than countries with intermediate levels. We make use of two factors to explain this pattern: the need to undertake reform (which is more urgent in countries with low social trust) and the ability to undertake reform (which is greater in countries with high social trust).
Subjects: 
Central banks
Independence
Social trust
Inflation
Monetary policy
Reform
JEL: 
E52
E58
P48
Z13
Document Type: 
Working Paper

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