Whether a country's central bank independence (CBI) status has a lowering effect on inflation is a controversial hypothesis. To date, this question could not be answered satisfactorily because the complex macroeconomics structure that gives rise to the data has not been adequately incorporated into statistical analyses. We have developed a causal model that summarizes the economic process of inflation. Based on this causal model and recent data, we discuss and identify the assumptions under which the effect of CBI on inflation can be identified and estimated. Given these and alternative assumptions  we estimate this effect using modern doubly robust effect estimators, i.e.  longitudinal targeted maximum likelihood estimators. The estimation procedure incorporated machine learning algorithms and was tailored to address the challenges that come with complex longitudinal macroeconomics data. We could not find strong support for the hypothesis that a central bank that is independent over a long period of time necessarily lowers inflation. Simulation studies evaluate the sensitivity of the proposed methods in complex settings when  assumptions are violated , and highlight the importance of working with appropriate learning algorithms for estimation.
The notion that an independent central bank reduces a country's inflation is a controversial hypothesis. To date, it has not been possible to satisfactorily answer this question because the complex macroeconomic structure that gives rise to the data has not been adequately incorporated into statistical analyses. We develop a causal model that summarizes the economic process of inflation. Based on this causal model and recent data, we discuss and identify the assumptions under which the effect of central bank independence on inflation can be identified and estimated. Given these and alternative assumptions , we estimate this effect using modern doubly robust effect estimators, i.e. , longitudinal targeted maximum likelihood estimators. The estimation procedure incorporates machine learning algorithms and is tailored to address the challenges associated with complex longitudinal macroeconomic data. We do not find strong support for the hypothesis that having an independent central bank for a long period of time necessarily lowers inflation. Simulation studies evaluate the sensitivity of the proposed methods in complex settings when certain assumptions are violated and highlight the importance of working with appropriate learning algorithms for estimation.
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Whether
The notion that an independent central bank reduces
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central bank independence (CBI) status has a lowering effect on
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this question could not be answered satisfactorily
it has not been possible to satisfactorily answer this question
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macroeconomics
macroeconomic
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have developed
develop
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CBI
central bank independence
A
,
A
,
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incorporated
incorporates
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was
is
R
that come
associated
R
macroeconomics
macroeconomic
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could
do
R
a central bank that is independent over
having an independent central bank for
A
certain
D
,