Central bank independence, economic freedom, and inflation rates

Measures of central bank independence combine many attributes that may or may not affect inflation. Central bank attributes are chosen as a result of political calculations over the distribution of resources between competing interest groups. Simultaneity bias results from regressions of central bank independence or of economic and political freedom on inflation or growth. Our estimates demonstrate the connections between economic and political freedom and central bank attributes that lead to inflation. Countries showing high degrees of economic freedom adopt structures that lead to lower inflation; those that show high degrees of political freedom do not adopt inflation-reducing institutional structures.     

A CRITICAL ASSESSMENT OF MEASURES OF CENTRAL BANK INDEPENDENCE

The methodology of measuring central bank independence suggested by Bade and Parkin three decades ago and inverse correlations between the measures and inflation have been widely accepted. The measurement literature has made important contributions identifying elements of institutional design that establish the relationship between the central bank and the government and the measurements from an ordinal perspective provide some useful insights about the major institutional redesigns of central banks during the past several decades. At the same time, the measurement literature is problematic. First, a dummy variable bifurcating central banks into groups of independent and less independent central banks can duplicate the standard correlations suggesting the information content of the specific measures is limited; second, the correlations between inflation and measures of independence are not as stable as claimed; and most important, the measurements are subject to classification problems that have not been fully appreciated. Review of the institutional design and history of the Bank of Korea, Bank of Japan, and the Federal Reserve provide evidence the classification problems are important. The measures of independence are more appropriately regarded as ordinal rankings of central bank independence rather than considered cardinal measures suitable for econometric modeling. (JEL E50, E58, E65)     

CENTRAL BANK INDEPENDENCE AND INFLATION: A NOTE

We document increased central bank independence within the set of industrialized nations. This increased independence can account for nearly two-thirds of the improved inflation performance of these nations over the past two decades. ( JEL E42, E58)     

POLITICAL AND ECONOMIC DETERMINANTS OF INTEREST RATE BEHAVIOR: ARE CENTRAL BANKS DIFFERENT?

Political influences on short-term interest rates in seventeen OECD countries from 1960–1990 are measured. After controlling for unexpected changes in inflation and unemployment, as well as changes in the world interest rate, short-term interest rates in most countries do not respond to political events, neither the timing of elections nor changes in the governing party. Thus, on this criterion, the central banks in this sample do not reveal large differences in their degree of independence from political influence. The small differences are not closely related to rankings of central bank independence based on quantification of central bank laws.     

‘There’s a lot of places I’d like to go and things I’d like to do’: the daily living experiences of adults with mild to moderate intellectual disabilities during a time of personalised social care reform in the United Kingdom

Adult social care services in the United Kingdom have undergone a period of transformation over recent years, characterised by a drive towards personalised care. Concurrently, social care budgets have been significantly reduced. This study aimed to explore the daily living experiences of adults with mild/moderate intellectual disabilities, who are at risk of no longer meeting eligibility criteria for statutory support. Focus group discussions, which included both people with intellectual disabilities and support workers, were analysed thematically. Two broad themes are presented: independence and agency; and social capital and well-being. While some participants echoed ideas central to the personalisation narrative, a number of contextual barriers to achieving greater independence and agency were discussed. Moreover, greater independence was not a desired goal for all participants. The findings highlight the potential mismatch between personalised social care, as delivered within significant budget constraints, and the needs of adults with intellectual disabilities.     

The duality of firms and directors in board interlock networks: A relational event modeling approach

The long tradition of scholarly work on corporate interlocks has left us with competing theoretical frameworks on the causes of interlock networks. Board interlocks are studied either as means to overcome the resource dependence of corporations or as a group cohesion mechanism of business elites. This contrast is due to an empirical divide of the literature where either the firms or the individuals are considered as decision-making bodies. In systematically ignoring the agency of the other group of actors, these literatures suffer from both theoretical and empirical biases in understanding the drivers of new interlocks. In this paper, we employ a relational event modeling technique that allows us to overcome this problem. The analysis of board appointments in Denmark demonstrates how in fact both personal and corporate considerations simultaneously drive the evolution of the corporate networks. The study of the duality of actors is essential for understanding the causes and consequences of corporate networks across time and space.     

‘Wishing to go it alone’: the complicated interplay of independence,interdependence and agency

Some individuals with disabilities for whom verbal speech is not reliable use facilitated communication to express thoughts and ideas. While they may require intensive physical support initially, the goal is independent typing. However, this emphasis on fading support and independence bears consideration. We utilize a Disability Studies lens to frame practices around independence and the complicated interplay between interdependence, agency and voice. Based on qualitative analysis of communication training sessions, we present four findings: the complexity of the message versus fading of physical support, the emotional dimensions of independence, the facilitator’s navigation of multiple roles, and the importance of facilitating agency. We also share implications of reframing independence and facilitating agency for the communication training process.     

Communication in the psychiatric halfway house and the double bind

The psychiatric halfway house is a partial institution whose prime function is to aid individuals to move gradually from the structured existence of the psychiatric hospital ward to the independence of autonomous living. As a social service agency interacting with community services, this facility often encounters unanticipated obstacles which hinder goal attainment for its clients. The problem we address is one such variable: the mixed message. It is of significant importance because it is often a product of unconscious behavior and is frequently cited as instrumental in the etiology of schizophrenia. Suggestions are offered as methods of averting mixed messages in both the intra-and interagency spheres.The authors wish to dedicate this article to the memory of Harry H. Moorhead, M.D.     

RULES AND DISCRETION WITH NONCOORDINATED MONETARY AND FISCAL POLICIES

The time inconsistency of optimal monetary policy is due to the effects of tax distortions. Thus the issue of how to improve upon the time-consistent suboptimal monetary policy is related to that of the coordination of monetary and fiscal policy. We present a model with three players (the central bark, the fiscal authority, and wage setters) in which distortionary taxes are explicitly modelled. We show that binding commitments to monetary rules are not necessarily welfare improving if monetary and fiscal policy are not coordinated. We also examine the effects of different degrees of independence of the central bank.     

Kafkaesque Bureaucracies as Natural Breaching Experiments: Interactional Failures and the Search for Institutional Agency

In accord with scholars who have suggested extending the symbolic interactionist perspective to investigate interactions with macrolevel structures, we argue that symbolic interactionism provides valuable tools to understand how bureaucratic breakdowns are interpreted by individuals. In this article, we use the experience of interacting with a Kafkaesque bureaucracy as a natural breaching experiment in order to outline the subjective effects of large‐scale institutional failure. In particular, we look at homeowners' interpretations of a flawed program initiated by the Obama administration to stem the tide of foreclosures. We conclude that persistent interaction failures with the bank divisions charged with modifying mortgages led frustrated and confused homeowners to question the nature of the bureaucratic interaction. This produced a search for a blame‐worthy agency and revealed the ways that agency was conceptualized in this complex and obscure institutional setting.     

Navigating norms and structures: young mothers’ pathways to economic independence

Understanding the complex relationships between childcare, education and work is crucial to acknowledging how young mothers express agency in their pathways to economic independence. Instead of considering them as a policy target group at risk for multiple reasons, this research reverses the perspective by focusing on young mothers’ agency in school and paid employment. The study is set in the Netherlands, where economic independence has become a focal point of social policy and practice, especially for young people. It explores how young mothers navigate norms and structures of education and employment, drawing on 18 months of participant observation and 41 semi-structured interviews with young mothers. Notions of ‘everyday’ and ‘bounded’ agency are used in analysing structural limitations (e.g. irregular working hours in ‘women’s jobs’, a lack of maternity leave at school) and norms (e.g. completing higher education and finding a good job versus being primary caretakers, enjoying children and being role models). School and workplace structures reinforce contradictory discourses of motherhood and economic independence. Young mothers exhibit agency in considering their options around job security, work experience, wages, student loans and spending time with children. In doing so, they navigate structural and normative collisions of economic independence and mothering.     

The rise (and fall?) of a state land bank

Land markets in most poor cities do not work very effectively and contribute to making social housing unaffordable. One once popular response was to set up a public land bank. In truth, few such banks were terribly successful and, with the onset of neo-liberalism, the approach fell out of fashion. However, one government recently established a state land bank in an attempt to slow the growth of illegal settlement and to improve housing conditions for the poor. Bogotá's efforts have had some measure of success although the agency could never achieve the ambitious goals set for it. The paper describes the different approaches of the agency over the last decade, the problems that it has faced and what it has managed to achieve. Today, the agency no longer buys land and prefers to work in association with private landowners; in effect, Bogotá no longer has a state land bank. However, what it does have is an interesting set of tools with which to confront land speculation and to discourage owners from holding on to serviced land. Whether this set of tools will be able to confront the perennial problem of providing land for affordable social housing remains to be seen. Nevertheless, Bogotá provides many lessons for governments in poorer cities about how and why they should take measures to improve the working of the land market.     

Central Bank Autonomy without Monetary Policy

The autonomy of a country’s central bank from political authorities has been advocated both as a remedy against the inflationary bias that would otherwise be present in the conduct of the government’s monetary policy and, more recently, on the basis of empirical evidence. However, both theoretical arguments and empirical findings have associated central bank autonomy with the conduct of monetary policy, while often failing to pay attention to those institutional cases where a central bank is in place but is not responsible for the conduct of monetary policy. These cases are particularly relevant for those countries which do not possess their own currency, or where extreme monetary regimes such as dollarization, currency boards, or monetary unions are present. These institutional settings, where a central bank exists, but there is no monetary policy to be conducted, raise the issue of central bank autonomy in a framework where the inflation bias is no longer pertinent. In other words: Is central bank autonomy still a relevant objective when a country does not run its own monetary policy? The present paper addresses this question, discusses dimensions of autonomy and accountability and maintains that central bank autonomy still does matter, particularly if the central bank is responsible for bank supervision and financial regulation.     

What constitutes agency and empowerment for women in later life?

Ageing ‘successfully’ in western society has often been associated with material issues relating to declining health, social care and welfare. Indeed, it has been suggested that these topics have dominated the study of ageing leading to overly pessimistic accounts of later life ( Phillipson, 1998 ). It is also the case that the concepts used to measure agency and empowerment, such as autonomy and in/dependence, are often uncritically understood and applied from a Western (British/American) standpoint. Here success is associated with individual potential, or the ability to adapt to the ‘challenges’ of growing older. Ultimately, this means that culturally diverse interpretations and experiences of what constitutes agency and empowerment, that may challenge such an account, are rendered invisible. In response, this paper examines and reflects upon the meanings that older women from different ethnic backgrounds give to agency and empowerment in later life. The empirical accounts discussed in the paper suggest that the meanings attached to autonomy, independence and agency and empowerment are contextually based.     

Optimal dividend distribution policy from the perspective of the impatient and loss-averse investor

This paper discusses a problem concerning intertemporal decision-making under uncertainty when its subject has psychological biases. Here, we consider an investment company as a decision maker that invests money from investors in a financial asset and pays some dividend every period depending on the performance of the investment. On the other hand, we assume investors have such psychological biases as inconsistent time preference and loss aversion. Through numerical experiments we show that the optimal dividend distribution under inconsistent time preference and loss aversion is quite different from the distribution without these psychological factors, and that combinations of the two factors produce various patterns of dividend distribution.     

Parental stress and factors for success in older-child adoption

By examining normal parental needs in child raising, the enormity of the task of adoptive parents taking older children become apparent. Predicting success is as yet unreliable, but it is possible to identify a set of characteristics found in successful adoptors. Although many of these qualities (or the lack thereof) are innate in families, agency philosophy and methods can affirm and enhance those that will best help parents cope. Creative parental survival is our best guarantee of healing and recovery in the children we place.     

The Feasibility of IFI‐Led Institutional Reform: Four Turkish Experiments Compared

Institutional reform has proved an enduring theme in the lending programmes of international financial institutions (IFIs) such as the IMF and the World Bank. But research harbours strong objections to the feasibility of IFI‐led institutional restructuring. This article evaluates these objections in the light of evidence from Turkey, a country with an early record of programme‐based reform initiatives in many institutional domains. Drawing on Turkey's central bank independence, banking regulation, anti‐corruption and agricultural subsidy reforms, it argues that IFI‐guided institutional restructuring may indeed encounter severe feasibility problems unless prescribed and implemented in a propitious environment marked by powerful international norms, widely accepted design templates, high levels of bureaucratic preparedness, and active endorsement from key domestic players.     

Chinese Beliefs in Luck are Linked to Gambling Problems via Strengthened Cognitive Biases: A Mediation Test

Problematic patterns of gambling and their harms are known to have culturally specific expressions. For ethnic Chinese people, patterns of superstitious belief in this community appear to be linked to the elevated rates of gambling-related harms; however, little is known about the mediating psychological mechanisms. To address this issue, we surveyed 333 Chinese gamblers residing internationally and used a mediation analysis to explore how gambling-related cognitive biases, gambling frequency and variety of gambling forms (‘scope’) mediate the association between beliefs in luck and gambling problems. We found that cognitive biases and scope were significant mediators of this link but that the former is a stronger mediator than the latter. The mediating erroneous beliefs were not specific to any particular type of cognitive bias. These results suggest that Chinese beliefs in luck are expressed as gambling cognitive biases that increase the likelihood of gambling problems, and that biases that promote gambling (and its harms) are best understood within their socio-cultural context.     

The problem of order: Understanding how culture predicts social action

How is social order possible? Scholars in a variety of sociological subfields have sought to address this question, known as the problem of order, building theories and evidence that have tended to center either structural forces or human agency. I explain how this dichotomy has shaped the direction and extent of our scholarly progress, focusing on debates and developments in sociological social psychology and cultural sociology, and consider how theoretical and empirical developments in these fields enable us to revisit the problem of order in pursuit of new questions and answers. The great promise of this work is in its ability to identify the micro–macro linkages that enable personal agency and social change, while also explaining why the social order is so durable and how we arrive at and enact a shared definition of the situation as often as we do given individual differences and self‐complexity.     

WHY DOESN'T SOCIETY MINIMIZE CENTRAL BANK SECRECY?

Societies have incentives to design institutions that allow central bank secrecy. This paper illustrates two of these incentives . First, if society tries to constrain secrecy in one way, central bankers will try to regain lost effectiveness by building up secrecy in other ways. Therefore, we may wind up accepting types of secrecy that appear preventable because reducing them would lead to higher costs . Second, if the social trade-offs between policy objectives change over time, the public may directly prefer greater central bank secrecy so that it will be surprised with expansionary policies when it most desires them.