SEEU Review vol. 5 Nr. 2 (pdf) - South East European University

SEEU Review Volume 5, No. 2, 2009
пресметуваме владината стапка на промет со цел да изведеме заклучок
(барем теоретски) за вистинската независност на Банката на Албанија.
Во последниот дел се дадени одговори на прашањата: Дали Банката на
Албанија е независна? Каков вид на независност се достигнува? Што
треба да се подобри за да имаме независна Централна банка?
Introduction
The independence of the central bank is a very important issue. If the
central bank is really independent, it is easier to achieve and maintain price
stability, or in other words, to control inflation. Two main reasons influence
the non-achievement of the price stability: (i) politicians try to push the
economy beyond the limit of the calculated and allowed capacities; (ii)
governments pressure central bank to finance the budget deficit. On the other
hand, the implementation of the Inflation Targeting regime is necessary for
having an independent central bank. For these reasons, in the first section of
this article we briefly explain the different definitions of the independence of
the central bank that are given from different economists. Afterwards, we
make a comparative analysis of South-Eastern European central banks’
independence. In the last section of the article we analyze the situation in
Albania. We calculate the new value of governors turn over rate that is one
of the indicators of real independence of the central bank. In the last section
we make an effort to answer questions like: Is the Bank of Albania
independent? What kind of independence is achieved? What should be
improved in order to have an independent central bank?
Literature review
Barro and Gordon (1983) were the first economists that seriously studied
the concept of central bank independence. They based their work on a
previous study of Kidland and Preskot (1977). Barro and Gordon argued that
the central bank tries to maximize the welfare of the society through the
control of inflation rate.
Bade and Parkin (1985) argued that if a central bank was free of direct
political pressure, it would achieve lower and more stable inflation. They
created an “independence” index and calculated it for 12 countries and
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