F. Almarhubi et Td. Willett, THE ANTIINFLATIONARY INFLUENCE OF CORPORATIST STRUCTURES AND CENTRAL-BANK INDEPENDENCE - THE IMPORTANCE OF THE HUMP-SHAPED HYPOTHESIS, Public choice, 84(1-2), 1995, pp. 153-162
Many studies have found strong negative correlations between central b
ank independence and inflation, but the casual significance of this re
lationship is often challenged. We find that the negative relationship
remains even when a number of other explanatory variables are conside
red. Special attention is given to the role of corporatism. Following
Calmfors and Driffell it is argued that both high and low levels of ce
ntralization should be associated with lower inflation. We present emp
irical support for his hump shaped hypothesis, and find that the inclu
sion of corporatism does not diminish the significance of central bank
independence.