1
Assistant Professor, Department of Economics, Tehran North Branch, Islamic Azad University
2
Economics. Student of Economics, Department of Economics and Accounting
Abstract
Inflation is one of the most important economic problems that imposes a lot of costs on society by disrupting macroeconomic indicators, which are reflected in the reduction of economic growth rate, rising unemployment rate and unequal distribution of income. In addition, high inflation and instability of inflation damage the credibility of macroeconomic policymakers, especially the central bank, and its continuation can lead to acute cases of political instability in countries. At the same time, uncertainties due to high inflation rates increase inflation expectations. Accordingly, solutions to control inflation have been proposed. One of these proposals was the independence of the central bank, which has gained many supporters since the 1980s. With regard to this issue, in this study, the effect of central bank independence and policy targeting on inflation control in the economies of 22 Asian countries was examined using the panel data approach during the period 2019-2010. The results of the study indicate that among the variables studied in the previous period inflation, trade freedom and monetary base have a positive and significant effect on current period inflation. In contrast, central bank independence, initial equilibrium, financial development, and exchange rate regimes have a significant negative impact on the dependent variable, inflation in the current economies of 22 Asian countries.
Adina Ionela Strachinaru and Bogdan Andrei Dumitrescu (2019), Assessing the Sustainability of Inflation Targeting: Evidence from EU Countries with Non-EURO Currencies, Sustainability, vol.11. mdpi.com/journal/sustainability .
Afshari, Zahra and Daraei, Fatemeh (2019), The Impact of Central Bank Independence on Stock Market Volatility, Journal of Money and Economy, Vol.13, No.4, Pp: 423-441
Zahra and Daraei. Fatemeh (2019), The Impact of Central Bank Independence on Stock Market Volatility, Journal of Money and Economy,Vol.13, No.4, Pp: 423-441
Dumiter Florin Cornel and HORA"IU FLORIN ȘOIM (2010), The correlation between central bank independence and inflation in developed and emerging countries, Proceedings of the 5th WSEAS International Conference on Economy and Management Transformation (Volume I)
Garriga, Ana Carolina and Cesar M. Rodriguez (2019),More Effective Than We Thought Central Bank Independence and Inflation in Developing Countries, Economic Modelling, Vol.5, No.9.Pp:1-49
Jamal, Bouoiyour and Refk Selmi (2018), The effects of central banks’ independence on inflation outcomes inemerging countries: Does the choice of exchange regime matter?, HAL Id:hal-01886584, https://hal.archives-ouvertes. fr/hal-01886584
Louka T. & Anastasia Theofilakou and Kalliopi-Maria Zekente (2019), Central bank independence and inflation preferences: New empirical evidence on the effects on inflation, BANK OF GREECE EURO SYSTEM, Working Paper
Kunaedi,Agung and Darwanto (2020), Central Bank Independence and Inflation: The Matters of Financial Development and Institutional Quality, Jurnal Ilmu Ekonomi, Vol.9, No.1,Pp: 1 – 14
Parkin, Michael (2013), The Effects of Central Bank Independence and Inflation Targeting on Macroeconomic Performance: Evidence from Natural Experiments, Economic Policy Research Institute. EPRI Working Papers.
Yahyazadehfar M., Mostakhdemin Hosseini. H, Shababi. H. and Mehrabi, Alamdari A. A. (2012) On the Relationship between Central Bank’s Independence and Inflation Rate in Iran, Int. J. Manag. Bus. Res. Vol.2, No.3, Pp: 219- 232.
gholami, A., Ahmadi, S. M. M., & pourghobadi, F. (2022). The effect of central bank independency and policy targeting on inflation control in developing countries. Economic Strategy, 10(39), 753-779.
MLA
amir gholami; Seyed Mohammad Mehdi Ahmadi; fatemeh pourghobadi. "The effect of central bank independency and policy targeting on inflation control in developing countries". Economic Strategy, 10, 39, 2022, 753-779.
HARVARD
gholami, A., Ahmadi, S. M. M., pourghobadi, F. (2022). 'The effect of central bank independency and policy targeting on inflation control in developing countries', Economic Strategy, 10(39), pp. 753-779.
VANCOUVER
gholami, A., Ahmadi, S. M. M., pourghobadi, F. The effect of central bank independency and policy targeting on inflation control in developing countries. Economic Strategy, 2022; 10(39): 753-779.
)