Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/306734 
Year of Publication: 
2022
Citation: 
[Journal:] CBN Journal of Applied Statistics [ISSN:] 2476-8472 [Volume:] 13 [Issue:] 2 [Year:] 2022 [Pages:] 155-184
Publisher: 
The Central Bank of Nigeria, Abuja
Abstract: 
This study examines the relationship between central bank independence (CBI), financial stability, and inflation in 14 African countries within the period 1985-2019. Initial test revealed the presence of cross-sectional dependence (CD) among the countries. Thus, the Mean Group (MG), Common Correlated Effect Mean Group (CCEMG) and Augmented Mean Group (AMG) were employed for the analysis. The CCEMG and AMG results showed a significant and negative correlation between central bank independence and inflation. On the other hand, financial stability is only significant in the MG Model. Additional results obtained using the Garriga CBI index is consistent with our main results. The study recommends greater independence of central banks from all forms of political and government influence in order to have greater chance of achieving lower inflation within the African nations.
Subjects: 
Augmented mean group
central bank independence
common correlated effect mean group
financial stability
inflation
mean group
JEL: 
E31
E58
Persistent Identifier of the first edition: 
Document Type: 
Article

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