Author/Authors :
Yahyazadehfar، M. نويسنده Faculty of Economics and Business Administration, University of Mazandaran, Babolsar, Iran , , Mostakhdemin Hosseini، H. نويسنده Raja Institute of Higher Education, Tehran, Iran , , Shababi، H. نويسنده Rahedanesh Institute of Higher Education, Babol, Iran , , Mehrabi Alamdari، A. A. نويسنده Mazandaran University of Science and Technology, Babol, Iran ,
Abstract :
The purpose of present paper was to examine the relationship between central bank independence
and inflation rate in Iran over 1960-2008. First, central bank independence has been accomplished through three
indices including legal and real CBI indices and turnover rate of central bank governor index. Then, Augmented
Dickey-Fuller test for model stationary of variables has been done by applying Eviews software. In addition, the
relationship among the central bank independence indices and average inflation rate and its variability in Iran’s
economy has been investigated using Eviews and Microfit softwares. Necessary data for calculating CBI index
were obtained from Cukierman criteria (LCBI). Furthermore, real CBI index was gathered via standard
questionnaire and turnover rate of central bank governor index data were collected through library survey. The
results showed a negative relationship among real CBI and inflation and its variability. The relationship between
legal CBI and inflation was also negative, but its relationship with inflation variability was not statistically
significant. Also, a positive relationship between turnover rate of central bank governor index and inflation rate
was observed, but negative relationship was seen between turnover rate of central bank governor index and
inflation rate variability.
