A MENSURAÇÃO DO GRAU DE INDEPENDENCIA DO BANCO CENTRAL: UMA ANÁLISE DE SUAS FRAGILIDADES

Abstract

The discussion about the independence of central banks is based on theoretical arguments and empirical evidence. The theoretical argument has been based on the hypothesis that policymakers are subject to the inflation bias. The main empirical argument is that there is a negative correlation between the degree of independence of central banks and inflation. The empirical analysis has gained more interest since the second half of the 80s and the beginning of the 90s with the development of independence indexes. This article demonstrates the fragility of the indexes that measure the level of independence of central banks and illustrates the case of Brazil. The findings denote that an increase of independence, as indicated by the indexes, is not capable of guaranteeing low rates of inflation.