The Impact of The Independence of The Central Bank on The Effectiveness Monetary Policy

Abstract

The point of this paper is that demonstrates the relationship between the monetary policy and effectiveness of central banks for country Iraq. In this setting in econometrical part we utilize board OLS strategy with the reel GDP information of country and dummy variable which represent to independence of central bank for investigation. We expect that effectiveness of central bank influences financial fiscal arrangement emphatically. This paper evaluates the relative adequacy of central bank effectiveness versus policy rules for the approach instruments in realizing great monetary policy. It analyzes recorded changes in (1) macroeconomic performance, (2) the adherence to rules based money policy, and (3) the level of central bank effectiveness. Macroeconomic performance is characterized regarding both financial stability and output stability. Both by right and accepted central bank effectiveness at the Federal Reserve are considered. The fundamental finding is that progressions in macroeconomic execution amid the past half century were nearly connected with changes in the adherence to rules-based fiscal arrangement and in the level of accepted money related autonomy at the Federal Reserve. In any case, changes in financial execution were not connected with changes in dejure central bank effectiveness. Formal central bank effectiveness alone has not created great money related approach results. A framework based structure is fundamental.