What effects exert Economic Globalization and Central Bank Transparency on inflation of OECD countries? An Application of LSDVC Estimator on a dynamic Panel Model - Archive ouverte HAL Accéder directement au contenu
Pré-Publication, Document De Travail Année : 2015

What effects exert Economic Globalization and Central Bank Transparency on inflation of OECD countries? An Application of LSDVC Estimator on a dynamic Panel Model

Résumé

This paper outlines the implications of central bank transparency coupled with economic globalization on the effectiveness of monetary policy at achieving low and stable inflation, through an empirical analysis on a sample of 34 OECD central banks. Our results are threefold: (i) There is a dampening and highly significant negative impact of economic globalization (measured by the composite index of Dreher et al., 2008) on inflation (ii) An appropriate and efficient U shape test proposed by Lind and Mehlum (2010), indicates a robust optimal intermediate degree of transparency, but suggests new evidence as to its level differently from van der Cruijsen et al. (2010). Indeed, the optimal level is higher and seems to vary according to the set of controls included in the regression. The estimations were run using a bias corrected Least Square Dummy variable (hereafter, LSDVC), developed by Bruno (2005) for short dynamic panels with fixed effects, and extended to accommodate unbalanced data. Alternative results using Generalized Method of Moments (hereafter GMM) estimators: (Arellano and Bond, 1991, hereafter AB; Blundell and Bond, 1998, hereafter BB) are also provided. (iii) We find, overall, that LSDVC and BB estimators exhibit satisfactory fit, while AB estimator doesn't confirm the hypothesis of a quadratic relationship between transparency and inflation.
Fichier principal
Vignette du fichier
What effects exert Economic Globalization and Central Bank Transparency on inflation of OECD countries.pdf (547.78 Ko) Télécharger le fichier
Origine Fichiers produits par l'(les) auteur(s)

Dates et versions

hal-01157387 , version 1 (28-05-2015)
hal-01157387 , version 2 (17-04-2016)

Identifiants

  • HAL Id : hal-01157387 , version 1

Citer

Emna Trabelsi. What effects exert Economic Globalization and Central Bank Transparency on inflation of OECD countries? An Application of LSDVC Estimator on a dynamic Panel Model. 2015. ⟨hal-01157387v1⟩
311 Consultations
960 Téléchargements

Partager

Gmail Mastodon Facebook X LinkedIn More