Does Central Bank Independence Affect Inflation?

Vera Gojčaj

doi:10.2478/jcbtp-2025-0027

Abstract

The objective of this paper is to analyze the impact of central bank independence on inflation in Western Balkan countries, from 2010q1 to 2022q4. In this paper the panel Autoregressive Distributed Lags (ARDL) model for six Western Balkan countries is used to analyse the effects of central bank independence on inflation. Results show that central bank independence has a negative effect on inflation in countries studied. These findings help management of banks and policymakers to find other monetary tools to reduce inflation and develop more effective regulations. The paper recommends central banks to use central bank independence to fight inflation.

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Does Central Bank Independence Affect Inflation?

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