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The Evolution of Central Bank Governance around the World

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  • Christopher Crowe
  • Ellen E. Meade

Abstract

The past two decades have seen enormous changes in central banks and their practices. In some countries, older institutions have been fundamentally restructured. In other, such as the countries of the former Soviet Union, entirely new central banks have been established. The member countries of the European Union have created a supranational central bank that oversees a monetary union. In all of these situations, central bank law was either revised or written de novo , while institutional objectives, practices, and structures were amended or created from scratch. In this article, we survey and quantify the trends in two major areas of central bank governance: independence and transparency. We document the steady progress toward greater central bank independence and transparency in a large number of industrial and developing countries over the past 10 to 15 years and discuss the effects of these aspects of governance on inflation. Finally, we touch on committee structure and decision making.

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/jep.21.4.69
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Bibliographic Info

Article provided by American Economic Association in its journal Journal of Economic Perspectives.

Volume (Year): 21 (2007)
Issue (Month): 4 (Fall)
Pages: 69-90

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Handle: RePEc:aea:jecper:v:21:y:2007:i:4:p:69-90

Note: DOI: 10.1257/jep.21.4.69
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  1. Christopher W. Crowe, 2006. "Testing the Transparency Benefits of Inflation Targeting," IMF Working Papers 06/289, International Monetary Fund.
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  4. Jon Faust & Lars E. O. Svensson, 1998. "Transparency and Credibility: Monetary Policy with Unobservable Goals," NBER Working Papers 6452, National Bureau of Economic Research, Inc.
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  13. Alesina, Alberto & Summers, Lawrence H, 1993. "Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 25(2), pages 151-62, May.
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  16. Guy Debelle & Stanley Fischer, 1994. "How independent should a central bank be?," Conference Series ; [Proceedings], Federal Reserve Bank of Boston, vol. 38, pages 195-225.
  17. Blinder, Alan S & Morgan, John, 2005. "Are Two Heads Better than One? Monetary Policy by Committee," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 37(5), pages 789-811, October.
  18. Ellen E. Meade, 2005. "The FOMC: preferences, voting, and consensus," Review, Federal Reserve Bank of St. Louis, issue Mar, pages 93-101.
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