EconPapers    
Economics at your fingertips  
 

Earthquakes and Economic Outcomes: Does Central Bank Independence Matter?

Jeroen Klomp () and John Sseruyange
Additional contact information
Jeroen Klomp: Netherlands Defence Academy
John Sseruyange: Makerere University

Open Economies Review, 2021, vol. 32, issue 2, No 5, 335-359

Abstract: Abstract This study explores whether the degree of central bank independence influences the economic performance in the period immediately following an earthquake. Earthquakes create a classic monetary policy challenge: how to accommodate the real shock in the short run with the objective of low inflation. The ultimate outcome of this dilemma depends for a large part on the degree of delegation of the monetary powers to an independent central bank and the inflation averseness of the central bank governors. Our main empirical findings clearly indicate that the increase in the inflation rate after an earthquake is significantly smaller when monetary policy is conducted by a more independent central bank. At the same time, countries with an independent central bank are confronted with a wider output gap after an earthquake suggesting a slower economic recovery.

Keywords: Output gap; Inflation; Central Bank Independence; Earthquakes; E52; E58; E3; Q54 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s11079-020-09593-4 Abstract (text/html)
Access to full text is restricted to subscribers.

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:kap:openec:v:32:y:2021:i:2:d:10.1007_s11079-020-09593-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-020-09593-4

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-08-26
Handle: RePEc:kap:openec:v:32:y:2021:i:2:d:10.1007_s11079-020-09593-4