In this paper, controlling for several macroeconomic factors, we test the hypothesis that central bank independence is closely correlated with the level of social consensus and cooperation about the determination of income distribution. Using data from a panel of OECD countries over period 1972-2002, we find evidence in favour of this hypothesis. When one allows, through some indexes of corporatism, for the degree of social consensus and cooperation in the determination of income distribution, the relationship between inflation and CBI weakens considerably. This evidence is consistent with the mechanism posited in Pittaluga and Cama (2004) according to which society formally endows the central bank with independence in order to safeguard a key principle of democracy, namely that decision-makers should be clearly responsible for their choices and actions.
|Titolo:||Inflation, Central Bank Independence and Corporatism: Does Corporatism Matter?|
|Data di pubblicazione:||2007|
|Appare nelle tipologie:||1.1 Articolo in rivista|