Central Bank Independence, Targets, and Credibility
Central Bank Independence, Targets, and Credibility

Author: Francesco Lippi

Publisher: Edward Elgar Publishing

Published: 1999-01-27

Total Pages: 180

ISBN-13: 9781782542971

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This book integrates new political and economic elements into the analysis of monetary policy credibility and central bank independence. The author considers imperfect monetary control, rational voters, distributional issues and uncertainty about future policy objectives in his welfare analysis of central banking. The role played by the different institutional elements that contribute to the making of an independent central bank is also assessed. A distinction is made between central bank independence and targets offering new insights into how a more inflation averse monetary policy may actually be achieved. Finally, explanations for the variation of central bank independence and conservatism across different countries are provided. This book will appeal to researchers, academics and policy makers in the fields of monetary policy, financial economics, money and banking and political economy.

Credibility of Central Bank Independence Revisited
Credibility of Central Bank Independence Revisited

Author: Mr.Timo Valila

Publisher: International Monetary Fund

Published: 1999-01-01

Total Pages: 17

ISBN-13: 1451841744

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The specific role of central bank independence in determining the overall credibility of monetary policy is addressed in this paper. It is argued that the credibility of delegating monetary policy to an independent central bank is endogenous to the credibility of the inflation target because a “conservative” inflation target may not be compatible with the fiscal policy stance. Also, lack of transparency in designing the institutional set-up is shown to be welfare-reducing.

Central Banks at a Crossroads
Central Banks at a Crossroads

Author: Michael D. Bordo

Publisher: Cambridge University Press

Published: 2016-06-09

Total Pages: 719

ISBN-13: 1107149665

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This book discusses the role of central banks and draws lessons from examining their evolution over the past two centuries.

Central Bank Independence
Central Bank Independence

Author: International Monetary Fund

Publisher: International Monetary Fund

Published: 1991-06-01

Total Pages: 59

ISBN-13: 1451966423

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There has been growing interest recently in the scope for promoting monetary stability through the establishment of independent central banks. This paper reviews the issues involved in central bank independence against the background of arrangements in nine countries. The analysis suggests that detailed institutional arrangements would need to be carefully designed if the potential benefits of central bank independence are to be delivered. Particularly important are the nature of arrangements to resolve various types of conflicts involving monetary policy, and arrangements to promote accountability and public monitoring of monetary policy performance.

Central Bank Independence and Disinflationary Credibility
Central Bank Independence and Disinflationary Credibility

Author: Adam Simon Posen

Publisher:

Published: 1995

Total Pages: 60

ISBN-13:

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Granting central banks independence from short-term political control is widely assumed to decrease inflation by increasing the credibility of commitments to price stability. This paper analyzes public- and private-sector behavior in a sample of seventeen OECD countries for evidence of variations in disinflationary credibility with monetary institutions. The paper does not find evidence that the costs of disinflation are lower in countries with independent central banks, even when differences in contracting behavior are taken into account. It also does not find evidence that central bank independence inhibits government collection of seignorage revenues or manipulation of economic policy for electoral gain. These results raise questions about some explanations of the negative correlation between central bank independence and inflation, as well as the empirical relevance of government time-inconsistancy problems as a source of inflation differences.

Institutions and Monetary Policy
Institutions and Monetary Policy

Author: Eric Schaling

Publisher: Edward Elgar Publishing

Published: 1995

Total Pages: 288

ISBN-13:

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Central bank independence is a key issue for political and monetary authorities in many countries. In this text, the author looks at the impact of different central banks on price stability and macroeconomic performance, and their optimal degree of legislative independence.

Central Bank Independence and Disinflationary Credibility
Central Bank Independence and Disinflationary Credibility

Author: Adam S. Posen

Publisher:

Published: 2007

Total Pages: 0

ISBN-13:

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Granting central banks independence from short-term political control is widely assumed to decrease inflation by increasing the credibility of commitments to price stability. This paper analyzes public- and private-sector behavior in a sample of seventeen OECD countries for evidence of variations in disinflationary credibility with monetary institutions. The paper does not find evidence that the costs of disinflation are lower in countries with independent central banks, even when differences in contracting behavior are taken into account. It also does not find evidence that central bank independence inhibits government collection of seignorage revenues or manipulation of economic policy for electoral gain. These results raise questions about some explanations of the negative correlation between central bank independence and inflation, as well as the empirical relevance of government time-inconsistency problems as a source of inflation differences.

Central Bank Independence and the Conduct of Monetary Policy in the United Kingdom
Central Bank Independence and the Conduct of Monetary Policy in the United Kingdom

Author: Mr.Jan Kees Martijn

Publisher: International Monetary Fund

Published: 1999-12-01

Total Pages: 23

ISBN-13: 145185840X

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The U.K. monetary policy framework, which combines inflation targeting with operational independence, provides a suitable arrangement for focused and credible monetary policy. However, potential weaknesses could result from features that have not yet been fully tested: the credibility and transparency of the inflation forecasts, which form the core of policy decisions, have diminished as a result of independence; and the framework could encourage excessive activism and frequent changes in interest rates. Although policy coordination could also suffer from independence, the new partly rules-based fiscal and monetary regimes will promote overall macroeconomic stability.

Checks and Balances, Private Information, and the Credibility of Monetary Commitments
Checks and Balances, Private Information, and the Credibility of Monetary Commitments

Author: Philip Keefer

Publisher: World Bank Publications

Published: 2001

Total Pages: 46

ISBN-13:

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In economically volatile conditions in which it is more difficult for the public to distinguish inflation deliberately generated by government from inflation created by unanticipated economic shocks, the anti-inflationary effect of central bank independence will be unchanged but the effectiveness of exchange rate pegs will be significantly improved. Keefer and Stasavage develop and test several new hypotheses about the anti-inflationary effect of central bank independence and exchange rate pegs in the context of different institutions and different degrees of citizen information about government policies.