Inflation in developing countries: does central bank independence matter? : new evidence based on a new data set

The authors analyze whether central bank independence (CBI) affects inflation in developing countries. For this purpose they have constructed a new data set for the turnover rate (TOR) of central bank governors for a very large sample of countries, which also covers the 1990s. They find that once various control variables are included, the CBI proxy is not always significant. They also conclude that in those regressions in which the CBI proxy is significant, the coefficient of the TOR often becomes significant only after high inflation countries are added to the sample.