When is a Central Bank Governor Fired? Evidence Based on a New Data Set

KOF Working Paper / KOF Swiss Economic Institute, ETH Zurich No. 143

37 Pages Posted: 5 Dec 2006

See all articles by Axel Dreher

Axel Dreher

Heidelberg University

Jakob de Haan

University of Groningen - Faculty of Economics and Business; De Nederlandsche Bank; CESifo (Center for Economic Studies and Ifo Institute)

Jan-Egbert Sturm

KOF Swiss Economic Institute, ETH Zurich; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: July 2006

Abstract

This paper uses a new data set on the term in office of central bank governors in 137 countries covering the period 1970-2004 to estimate a model for the chance that a central bank governor is replaced. We formulate a number of hypotheses based on the literature on the determinants of central bank independence that are tested using conditional logit models and the Extreme Bounds Analysis. We conclude that, apart from the share of the current term in office elapsed, high levels of political and regime instability, the occurrence of elections, and high inflation increase the probability of a turnover.

Keywords: central bank governors, central bank independence

JEL Classification: E5

Suggested Citation

Dreher, Axel and de Haan, Jakob and Sturm, Jan-Egbert, When is a Central Bank Governor Fired? Evidence Based on a New Data Set (July 2006). KOF Working Paper / KOF Swiss Economic Institute, ETH Zurich No. 143. Available at SSRN: https://ssrn.com/abstract=949170 or http://dx.doi.org/10.2139/ssrn.949170

Axel Dreher (Contact Author)

Heidelberg University ( email )

Grabengasse 1
Heidelberg, 69117
Germany

HOME PAGE: http://www.axel-dreher.de

Jakob de Haan

University of Groningen - Faculty of Economics and Business ( email )

PO Box 800
Groningen, 9700 AV
Netherlands
+31 0 50 3633706 (Fax)

De Nederlandsche Bank ( email )

P.O. Box 98
Amsterdam, 1000 AB
Netherlands

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

HOME PAGE: http://www.CESifo.de

Jan-Egbert Sturm

KOF Swiss Economic Institute, ETH Zurich ( email )

Zurich
Switzerland

HOME PAGE: http://www.kof.ethz.ch

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, 81679
Germany

HOME PAGE: http://www.cesifo.de

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