This work empirically investigates the effect of the interaction between the rule of law and legal central bank independence (CBI) on price stability (the level of inflation and inflation volatility), employing a panel dataset that covers up to 124 countries over the period from 1970 to 2013. A...

Discussions of central bank independence usually centre around monetary policy, specifically the freedom of central banks to use interest rates to tackle inflation. However, as the financial crisis showed, financial stability is also important and this requires robust supervision/regulation of...