King DN & Ma Y (2001) Fiscal decentralization, central bank independence, and inflation. Economics Letters, 72 (1), pp. 95-98. http://www-scopus-com.ezproxy.stir.ac.uk/record/display.url?eid=2-s2.0-0035630849&origin=resultslist&sort=plf-f&src=s&st1=Fiscal+decentralization%2c+central+bank+independence%2c+and+inflation&sid=F378058BA5BB4D379217DCE03CA09A48.y7ESLndDIsN8cE7qwvy6w%3a120; https://doi.org/10.1016/S0165-1765%2801%2900405-0
We develop earlier cross-sectional studies of inflation rates by adding the degree of tax centralization as another explanatory variable. This makes central bank independence perform appreciably better as an explanatory variable. Also, we find that centralized countries have higher inflation.
Decentralization; Inflation; Central bank independence
Economics Letters: Volume 72, Issue 1