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Front Cover; Identification, Equivalent Models, and Computer Algebra; Copyright Page; Table of Contents; Acknowledgements; LIMITED WARRANTY AND DISCLAIMER OF LIABILITY; Chapter 1. Introduction; 1.1 Themes of this book; 1.2 An overview of the book; 1.3 Limitations; 1.4 On notation; 1.5 Tie commutation matrix; 1.6 Computer algebra; Chapter 2. Identification, equivalence and the computerized evaluation of rank conditions; 2.1 Introduction; 2.2 Basic concepts; 2.3 Identification and the rank of the information matrix; 2.4 The Jacobian matrix critérium; 2.5 Prior information.

AbstractWe argue that central bank independence (CBI) is a latent variable of which the various existing quantifications are imperfect indicators. We show how factor analysis techniques can be employed to assess the quality of the various indicators, and how an optimal weighting of the indicators can be obtained that gives the best approximation of CBI. We also show how these results can be utilized in models in which CBI is an explanatory variable. In contrast to the well‐known study of Campillo and Miron (1997), we find that our CBI indicator is significantly related to inflation, also when various control variables are included.

We argue that central bank independence (CBI) is a latent variable of which the various existing quantifications are imperfect indicators. We show how factor analysis techniques can be employed to assess the quality of the various indicators, & how an optimal weighting of the indicators can be obtained that gives the best approximation of CBI. We also show how these results can be utilized in models in which CBI is an explanatory variable. In contrast to the well-known study of, we find that our CBI indicator is significantly related to inflation, also when various control variables are included. 8 Tables, 2 Figures, 29 References. Adapted from the source document.