This paper investigates the argument for Central Bank Independence (CBI) in the case of
Greece. Using a time series approach and the last data available before Greece joined the
EMU, the hypothesis that central bank independence is important for controlling inflation
is examined. Employing two indices, which serve as proxies for CBI, LegalCBI and TOR,
the inverse relationship between CBI and inflation was confirmed. The interactions
between the variability of inflation and CBI were also investigated. Furthermore,
evidence was found to suggest that the rate of turnover Granger causes inflation.