Graduation Year


Date of Submission


Document Type

Open Access Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Angela Vossmeyer

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This paper examines the effect of Latin American central bank independence (CBI) on risk-averse behaviors in monetary policy. Using a fixed effects panel regression, I document how multiple forms of monetary policy are influenced by different macroeconomic variables, conflicting policy targets and central bank independence benchmarks. The results show that increasing CBI has a positive impact on risk aversion, especially in policies targeting inflation and money supply. Additionally, the results show that interest rates and reserve requirements were especially susceptible to changes in independence, while the monetary base and volume of domestic credit were less influenced. Finally, as time and inflation affect independence, they often also show a positive relationship with risk-averse policy implementation.