Previous research on central bank independence has used indices as a measure of independence. This technique implicitly assumes that all aspects of independence have similar effects on macroeconomic variables. Statistical tests show that some aspects of independence reduce the inflation rate and inflation variance, while others do not. This result confirms that indices are inadequate for measuring independence. The effects of independence appear to be significant in the short run, but insignificant in the long run.
"The Components of Central Bank Independence and Their Effects,"
Undergraduate Economic Review: Vol. 4
, Article 12.
Available at: http://digitalcommons.iwu.edu/uer/vol4/iss1/12