To What Extent Does Central Bank Independence Alleviate Poverty in Developing Countries?

Ayoub Rabhi

Journal of Central Banking Theory and Practice, 2024, vol. 13, issue 3, 167-189

Abstract: This paper investigates the nexus between poverty and central bank independence in developing countries. The study examines data from up to 35 developing countries from 2000 to 2018. Using the GMM dynamic panel data method, the study finds that de jure central bank independence is more robust than de facto in reducing inflation. However, the effect of de facto central bank independence is significant in reducing poverty, while de jure central bank independence is not. The paper concludes that central bank independence may play a role in managing inflation in developing countries with high inflation and could relatively contribute to poverty reduction in these countries.

Keywords: Central Bank Independence; Monetary Policy; Inflation; Poverty; Developing countries. (search for similar items in EconPapers)
JEL-codes: C33 E42 E52 E58 O11 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:13:y:2024:i:3:p:167-189

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