Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/240686 
Year of Publication: 
2019
Series/Report no.: 
Working Papers No. 2019-18
Publisher: 
Banco de México, Ciudad de México
Abstract (Translated): 
This paper analyzes the relationship between central bank independence and inflation in a panel of 182 countries for the period from 1970 to 2018. To measure the degree of independence, two measures are used, the Garriga (2016) index, constructed from the laws and internal regulations of central banks, and the Dreher et al. (2008) index, based on the turnover rate of governors. The results indicate that greater central bank independence is associated with lower levels of inflation, both for highincome countries and for low and middle-income countries. There is also a negative relationship between inflation volatility and central bank independence, although the results are statistically significant only when using the full sample of countries. The results are robust to the use of the two alternative measures of Independence and to the use of two alternative approaches to avoid simultaneity.
Subjects: 
Central Bank Independence
Inflation
JEL: 
E31
E52
E58
Document Type: 
Working Paper
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