Does Central Bank Independence and Governance Matter in Asia Pacific?

This study examines the relationship between inflation and CBIG in Asia Pacific. It applies an unique CBIG index model to rank central banks and establishes a significant relationship between CBIG (both overall and with sub-indices) and inflation in a pooled regression model. It also finds that improved CBIG after Asian financial crisis in 1997 has helped lower inflation; there is no significant relationship between CBIG and inflation in terms of exchange rate regimes, and found a mixed relationship between CBIG and inflation for low- and high-income countries