Central Bank Independence and Inflation: The Case of Greece

Revista de Economia del Rosario Bogota (Colombia), Vol. 9, No. 1, pp. 95-109, June 2006

15 Pages Posted: 29 Aug 2006

See all articles by Theodore Panagiotidis

Theodore Panagiotidis

University of Macedonia - Department of Economics

Afroditi Triampella

Panteion University - Department of Economics

Abstract

This paper discusses the argument for Central Bank Independence (CBI) in the case of Greece. Using a time series approach and the last data available before Greece joined the EMU, the hypothesis that Central Bank Independence is important for controlling inflation is examined. Employing two indices, which serve as proxies for CBI, Legal CBI and TOR, the inverse relationship between CBI and inflation was confirmed. The interactions between the variability of inflation and CBI were also investigated. Furthermore, evidence was found to suggest that the rate of turnover Granger causes inflation.

Keywords: Central Bank Independece, inflation, Greece

JEL Classification: E58, E52

Suggested Citation

Panagiotidis, Theodore and Triampella, Afroditi, Central Bank Independence and Inflation: The Case of Greece. Revista de Economia del Rosario Bogota (Colombia), Vol. 9, No. 1, pp. 95-109, June 2006, Available at SSRN: https://ssrn.com/abstract=927115

Theodore Panagiotidis (Contact Author)

University of Macedonia - Department of Economics ( email )

Thessaloniki, 54006
Greece

Afroditi Triampella

Panteion University - Department of Economics ( email )

136, Sygrou Avenue
176 71 Athens
Greece

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