The Sensitivity of Central Bank Independence Measurements to Inflation in Iran: A New Approach

Ahmad Jafari, Samimi Amir, Mansour Tehranchian, Mohammad, Ali, Kaveh Derakhshani, Darabi
2015 International Journal of Business and Development Studies   unpublished
The purpose of this study is finding the sensitivity of central bank independence measurements on its impact on inflation in Iran. To this aim different measurements of the central bank independence were calculated using the indices of Grilli et al. (1991), Cukierman et al. (1992), Mathew (2006) and Dumiter (2009) for the period 1961-2012. Although results of correlation between CBI index and inflation shows that there is a negative correlation between all CBI index and inflation, but the
more » ... ted results using the Autoregressive Distributed Lag (ARDL) show except for the index of Grilli et al. (1991) other indices have similar short run and long run significant negative effect on the inflation in Iran. So the CBI have the sensitivity to definition. Also, results of estimation shows that there isn't any significant differences between the impact of Cukierman et al. (1992), Mathew (2006) and Dumiter (2009) index on the inflation. So this indices can be used interchangeably.