The research work presented below addresses the possible concern of central bank independence through the development and application of econometric models. The complexity of the modelling has allowed a step further in corroborating that financial independence is not only linked to the...

This paper considers econometric issues related to time series data that have been subject to abrupt governmental interventions. The motivating example for this study is the Brazilian monthly inflation and interest rate series (1974:1- 1994:6) which we use throughout for illustration. These...