:: Volume 13, Issue 4 (Fall 2018) ::
J. Mon. Ec. 2018, 13(4): 423-441 Back to browse issues page
The Impact of Central Bank Independence on Stock Market Volatility
Zahra Afshari 1, Fatemeh Daraei2
1- lzahra University
2- Alzahra University
Abstract:   (1059 Views)
The new paradigm in monetary policymaking gives accent to central banks‘ Independence. It is widely accepted that in modern monetary policymaking, central banks have three key goals: price stability, output stability and financial stability. Recent studies on central bank independence mainly investigate the effects of central bank independence on economic stability. But the effectiveness of central bank independence  on financial stability after 2008 financial crises is controversial .This paper investigates the impacts of central banks’ independence On stock market volatility as a measure of financial stability. By using panel data for 53 selected countries for  the  2004-2012   period, the  results implies a positive relationship between central bank independence and stock market volatility.The findings is consistent with central bank credibility paradox.
Keywords: Stock Market Volatility, Central bank independence index, Central bank independence paradox
Full-Text [PDF 208 kb]   (1065 Downloads)    
Type of Study: Original Research - Theoric | Subject: Monetary Economics
Received: 19 Sep 2019 | Accepted: 13 Oct 2019 | Published: 12 Nov 2019


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Volume 13, Issue 4 (Fall 2018) Back to browse issues page