Central bank independence, inflation, and growth in Africa

Christine O. Strong

Chapter 7 in Are Central Banks Still Conservative?, 2025, pp 157-184 from Edward Elgar Publishing

Abstract: Using a newly constructed dataset, this chapter explores the connection between central bank independence (CBI), inflation, and economic growth. Using legal CBI and the turnover rate of central bank governors (TOR), decomposed into two measures of alliance and inflation for 34 African countries for the period 1980–2020, this study assesses the impact of inflation on economic growth, conditional on CBI. The results of this study reveal that legal CBI is associated with a statistically significant decrease in inflation, but no such effect is found for TOR. Furthermore, legal CBI plays a pivotal role in the inflation-growth relationship among African countries. In particular, we find that as African countries are granted a higher degree of legal CBI, an increase in inflation is associated with higher economic growth.

Keywords: Central bank independence; Ally; Turnover rate; Inflation; Economic growth (search for similar items in EconPapers)
Date: 2025
ISBN: 9781035337569
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