The present paper uses a paneldata estimation technique to combine the
time series for individual countries (Australia, Canada, France, Germ
any, Italy, Japan, the Netherlands, Switzerland, the United Kingdom an
d the United States). We postulated the response of central banks in t
hese countries to inflation, economic growth and current account surpl
us given the constraints to be the same among the sample countries. Di
fferences between central bank independence come forward in a differen
t structural pressure to lower or raise money market rates in these co
untries. The empirical results in this study coincide remarkably well
with the legal indices of central bank independence.