Central Bank Autonomy: Lessons from Global Trends

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

April 1, 2007

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Bernard J Laurens, Martin Sommer, Marco Arnone, and Jean-François Segalotto. Central Bank Autonomy: Lessons from Global Trends, (USA: International Monetary Fund, 2007) accessed November 21, 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

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.

Subject: Banking, Central bank autonomy, Central bank credit, Emerging and frontier financial markets, Inflation

Keywords: CBA Autonomy, Central bank, Country, Developing country, Government, WP

Publication Details

Pages:

53
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/088
Stock No:

WPIEA2007088
ISBN:

9781451866520
ISSN:

1018-5941

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