Political and economic determinants of interest rate behavior: Are central banks different?

Political influences on short-term interest rates in seventeen OECD countries from 1960-1990 are measured. After controlling for unexpected changes in inflation and unemployment, as well as changes in the world interest rate, short-term interest rates in moist countries do not respond to political events, neither the timing of elections nov changes in the governing party. Thus, on this criterion, the central banks in this sample do not reveal large differences in their degree of independence from political influence. The small differences are not closely related to rankings of central bank independence based on quantification of central bank laws.