Does an Independent Central Bank Smooth Exchange Rate Volatility? Evidence from Time-Varying Panel Causality Analysis
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Date
2024
Journal Title
Journal ISSN
Volume Title
Publisher
Sciendo
Access Rights
info:eu-repo/semantics/openAccess
Abstract
This paper empirically examines the effect of the central banks independence on exchange rate volatility by using a large data-set for the E7 (7 emerging countries) covering the period 1998-2017. This paper applies the time-varying panel causality analysis to obtain country-based results. The results show that the policy design, with relatively independent central banks, provides supportive results for macroeconomic stability. It is concluded that policies focusing on current problems by ignoring macroeconomic stability, such as the 2008 crisis, have eliminated the relationship between bank independence and stability.
Description
Keywords
Time-varying panel causality analysis, E7 countries, Central Bank, Monetary Policy Strategy, C33, E58, F31
Journal or Series
Journal of Central Banking Theory and Practice
WoS Q Value
N/A
Scopus Q Value
Volume
13
Issue
2
