SFB 303 Discussion Paper No. B - 352
Author: Neumann, Manfred J.M.
Title: Problems in Measuring Central Bank Independence
Abstract: It is worthwhile trying to develop an indicator of actual central bank independence. A first attempt was
made by Cukierman (1992) who used the turnover rate of central bank governors as an approximation. In section
III we will try a different approach towards measuring the actual dependence of central banks. An indicator will
be derived from a model of optimal monetary policy where the degree of central bank independence is
determined by the weight the central banker attaches to the governmentīs objective function which is treated as
an input to the central bankerīs objective function.
Keywords: Central bank independence, central bank indicators
JEL-Classification-Number:
Creation-Date: January 1996
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