Does central bank independence contribute to fiscal prudence in EU countries?
This study explores the influence of central bank independence (CBI) on fiscal deficits in 27 European Union (EU) member states from 1990 to 2023. Utilizing system generalized method of moments, we find that countries with more independent central banks tend to exhibit stronger fiscal balances. Howe...
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| Veröffentlicht in: | Panoeconomicus S. 24 |
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| Hauptverfasser: | , , |
| Format: | Journal Article |
| Sprache: | Englisch |
| Veröffentlicht: |
2024
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| ISSN: | 1452-595X, 2217-2386 |
| Online-Zugang: | Volltext |
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| Zusammenfassung: | This study explores the influence of central bank independence (CBI) on
fiscal deficits in 27 European Union (EU) member states from 1990 to 2023.
Utilizing system generalized method of moments, we find that countries with
more independent central banks tend to exhibit stronger fiscal balances.
However, the impact is tempered within the Eurozone. Positive coefficients
for GDP growth, adherence to fiscal rules, and democratic governance
structures highlight their importance for fiscal sustainability. Our
findings underscore the complex interplay of factors shaping fiscal
balances, emphasizing the need for policy coordination and prudent fiscal
management within the EU. |
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| ISSN: | 1452-595X 2217-2386 |
| DOI: | 10.2298/PAN240726024P |