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A random forests approach to assess determinants of central bank independence

  • Maddalena Cavicchioli
  • , Ariadni Papana
  • , Ariadni Papana Dagiasis
  • , Barbara Pistoresi
  • University of Verona
  • Aristotle University of Thessaloniki
  • Cleveland State University
  • University of Modena and Reggio Emilia Modena and Reggio

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

A non-parametric efficient statistical method, Random Forests, is implemented for the selection of the determinants of Central Bank Independence (CBI) among a large database of economic, political, and institutional variables for OECD countries. It permits ranking all the determinants based on their importance in respect to the CBI and does not impose a priori assumptions on potential nonlinear relationships in the data. Collinearity issues are resolved, because correlated variables can be simultaneously considered.
Original languageEnglish
Article numbereP2611
JournalJournal of Modern Applied Statistical Methods
Volume17
Issue number2
DOIs
StatePublished - Jan 1 2018

Keywords

  • Central bank independence
  • Collinearity
  • Determinants
  • Minimal depth
  • Random forests

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