Measures of Central Bank Autonomy: Empirical Evidence for OECD, Developing, and Emerging Market Economies

By Jean-François Segalotto, Marco Arnone, Bernard J Laurens

October 1, 2006

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Jean-François Segalotto, Marco Arnone, and Bernard J Laurens. Measures of Central Bank Autonomy: Empirical Evidence for OECD, Developing, and Emerging Market Economies, (USA: International Monetary Fund, 2006) accessed November 8, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper presents an update of the Grilli-Masciandaro-Tabellini (GMT) index of central bank (CB) autonomy, based on CB legislation as of end-2003. The index is applied to a set of OECD and developing countries, and emerging market economies. For a smaller set of countries, the paper presents a reconstruction of the GMT index based on Cukierman (1992) and assesses changes in CB autonomy between 1992 and 2003. The results point to a significant increase in CB autonomy, in particular for developing countries. In most cases, this improvement has involved a three-stage process: an initial stage in which the political foundations for CB autonomy are laid; a second stage in which operational autonomy develops; and a final stage in which CBs gain further political autonomy in terms of policy formulation and the appointment of senior management.

Subject: Banking, Central bank autonomy, Central bank legislation, Central banks, Emerging and frontier financial markets, Financial markets, Legal support in revenue administration, Revenue administration

Keywords: Africa, Autonomy, Autonomy measure, CB autonomy, Central bank, Central bank autonomy, Central bank legislation, Country, Developing country, Economic autonomy, Emerging and frontier financial markets, GMT indicator, GMT methodology, Instrument autonomy, Legal support in revenue administration, Lending to the government, OECD countries' performance, OECD country, OECD-member country, Policy autonomy, Political autonomy, WP

Publication Details

Pages:

38
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2006/228
Stock No:

WPIEA2006228
ISBN:

9781451864885
ISSN:

1018-5941

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