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Economic policy responses to the COVID-19 pandemic: The role of central bank independence

Elgin, Ceyhun, Yalaman, Abdullah, Yasar, Sezer and Basbug, Gokce 2021. Economic policy responses to the COVID-19 pandemic: The role of central bank independence. Economics Letters 204 , 109874. 10.1016/j.econlet.2021.109874

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Is central bank independence (CBI) associated with economic policy responses to mitigate the adverse economic effects of the COVID 19 pandemic? In this paper, we provide cross-country evidence that it does. Our results generally indicate that more independent monetary policy authorities have adopted smaller cuts in the policy rate and reserve requirements. However, fiscal and macro-financial packages are relatively larger in countries with more independent central banks. These results are robust to different sets of control variables and different econometric specifications that include an instrumental variable estimation.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Business (Including Economics)
Publisher: Elsevier
ISSN: 0165-1765
Date of First Compliant Deposit: 11 April 2023
Date of Acceptance: 20 April 2021
Last Modified: 29 May 2023 01:14

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