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Title: A cross-country comparison of central banking : implications for the European system of central banks
Author: Hackenberg, F.
Awarding Body: University College of Swansea
Current Institution: Swansea University
Date of Award: 1995
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The Treaty of Maastricht envisages a European System of Central Banks with the European Central Bank (ECB) as its centre-piece, designed to be independent and pursuing the primary objective of price stability. This study is concerned with the independence of central banks and its related issues. A focus is put on the question of whether the degree of central bank independence determines a country's inflation performance. Furthermore, the definition, determination, and measurement of central bank independence are developed. The results of an international survey made it possible to identify criteria which, in the eyes of the responding central bankers, are crucial in determining central bank independence. Moreover, it was possible to construct a new weighting system, based on various indices of which one is called the central bank independence index (CBI), which reacts more sensitively to a change in a central bank act than other indices. Therefore it is possible to determine independence more precisely than previous methods. Analysing this new "weighting approach" it was found that there is a negative correlation between central bank de jure independence and a nation's inflation level and, when comparing the CBI to existing indices, the former performs better in explaining a country's rate of inflation. Applying these findings to the future ECB the conclusion reached is that the ECB will have a high degree of de jure central bank independence, compared to those central banks in the study, thus it will help in achieving a low-level inflation within the European Union. Nevertheless, there is also an indication that, although granting legal independence to the ECB, the Treaty of Maastricht provides various articles, which might undermine the Bank's de jure independence.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available