Central Bank Independence in Iran: A Theoretical and Empirical Analysis

The purpose of this paper is to evaluate and measure the central bank independence and its determinants in Iran. To calculate the degree of central bank independence different indices such as Grilli et al (1991), Cukierman et al (1992), Mathew (2006) and Dumiter (2009) have been used .Also, the monetary and banking laws of 1960 and 1972 and their revisions as well as other new laws related to central bank independence during 1960 - 2012 were taken into consideration to measure the trend of the central bank independence in Iran. The paper findings indicate a decreasing trend of the central bank independence in the country based on almost all different indices during the period under consideration. Also, it is shown that the development laws especially after the Islamic revolution has been among important factors affecting the degree of the central bank independence in Iran.