The Relation between Central Bank Independence and Inflation Rate in Egypt: An Empirical Analysis during 1998-2019

Mai Wagdy ElHodaiby and Ahmed Elsamman
Additional contact information
Mai Wagdy ElHodaiby: Researcher, Faculty of Economics and Political Sciences, Cairo University, Cairo, Egypt
Ahmed Elsamman: Department of Economics, Faculty of Economics and Political Science, Cairo University, Cairo, Egypt

International Journal of Economics and Financial Issues, 2021, vol. 11, issue 1, 114-125

Abstract: This paper examines the relation between granting central banks more independence represented in both its manifested legal charter as well as actual practices adopted and inflation in Egypt during the period from 1998-2019. To do so, this paper first looks at the evolution of different central bank independence (CBI) measures and adopts the most comprehensive relevant one. Consequently, it runs a regression model adopting an autoregressive distributed lag (ARDL) model, regressing the dependent variable inflation on its determinants of legal CBI, actual CBI, M2 and openness, to capture such relation in both the short and long term time dimensions in the case of Egypt. The paper further provides an interpretation of computed outcomes, where it presents robust evidence of an inverse relation between inflation and CBI in Egypt in the period under study in its legal and actual form and in both the short-run and the long-run.

Keywords: Central bank independence; Central Bank of Egypt; Inflation; Autoregressive distributed lag; unit root test (search for similar items in EconPapers)
JEL-codes: E31 E37 E42 E58 (search for similar items in EconPapers)
Date: 2021
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.econjournals.com/index.php/ijefi/article/download/10941/pdf (application/pdf)
https://www.econjournals.com/index.php/ijefi/article/view/10941/pdf (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eco:journ1:2021-01-12

Access Statistics for this article

International Journal of Economics and Financial Issues is currently edited by Ilhan Ozturk

More articles in International Journal of Economics and Financial Issues from Econjournals
Bibliographic data for series maintained by Ilhan Ozturk ().