Central Bank Autonomy: Lessons from Global Trends

55 Pages Posted: 16 May 2007

See all articles by Marco Arnone

Marco Arnone

Centre for Macroeconomics & Finance Research (CeMaFiR); Catholic University of the Sacred Heart of Milan - Institute for Economic Policy

Bernard Laurens

International Monetary Fund (IMF) - Monetary and Foreign Exchange Operations Division

Jean-François Segalotto

Catholic University of the Sacred Heart of Milan

Martin Sommer

International Monetary Fund (IMF) - Research Department

Date Written: April 2007

Abstract

We calculate indexes of central bank autonomy (CBA) for 163 central banks as of end-2003, and comparable indexes for a subgroup of 68 central banks as of the end of the 1980s. The results confirm strong improvements in both economic and political CBA over the past couple of decades, although more progress is needed to boost political autonomy of the central banks in emerging market and developing countries. Our analysis confirms that greater CBA has on average helped to maintain low inflation levels. The paper identifies four broad principles of central bank autonomy that have been shared by the majority of countries. Significant differences exist in the area of banking supervision where many central banks have retained a key role. Finally, we discuss the sequencing of reforms to separate the conduct of monetary and fiscal policies.

Keywords: Central banks, Inflation, Bank supervision, Monetary policy, Fiscal policy

Suggested Citation

Arnone, Marco and Laurens, Bernard J. and Segalotto, Jean-François and Sommer, Martin, Central Bank Autonomy: Lessons from Global Trends (April 2007). IMF Working Paper No. 07/88, Available at SSRN: https://ssrn.com/abstract=986816

Marco Arnone

Centre for Macroeconomics & Finance Research (CeMaFiR) ( email )

Piazza Mirabello, 2
Milano, 20121
Italy

HOME PAGE: http://www.a-bpfoundation.org

Catholic University of the Sacred Heart of Milan - Institute for Economic Policy ( email )

Via Necchi, 5
20123 Milan
Italy
+39 02 72342921 (Phone)

Bernard J. Laurens

International Monetary Fund (IMF) - Monetary and Foreign Exchange Operations Division ( email )

Monetary and Capital Markets Department
700 19th Street NW
Washington, DC 20431
United States

Jean-François Segalotto (Contact Author)

Catholic University of the Sacred Heart of Milan ( email )

Largo Gemelli, 1
Via Necchi 9
Milan, MI 20123
Italy

Martin Sommer

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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