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An argument in favor of long terms for central bankers

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  • Hahn, Volker

Abstract

Drawing on the canonical New Keynesian model, we assess the impact of central bankers’ term duration on governments’ appointment choices. We show that longer terms induce the government to appoint more conservative central bankers, which is socially desirable.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 122 (2014)
Issue (Month): 2 ()
Pages: 132-135

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Handle: RePEc:eee:ecolet:v:122:y:2014:i:2:p:132-135

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Web page: http://www.elsevier.com/locate/ecolet

Related research

Keywords: Term length; Conservative central banker; New Keynesian model;

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References

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  1. Schaumburg, Ernst & Tambalotti, Andrea, 2007. "An investigation of the gains from commitment in monetary policy," Journal of Monetary Economics, Elsevier, vol. 54(2), pages 302-324, March.
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  10. Perino, Grischa, 2010. "How delegation improves commitment," Economics Letters, Elsevier, vol. 106(2), pages 137-139, February.
  11. Marco M. Sorge, 2012. "Robust Delegation with Uncertain Monetary Policy Preferences," EERI Research Paper Series EERI_RP_2012_05, Economics and Econometrics Research Institute (EERI), Brussels.
  12. Eslava, Marcela, 2010. "Central bankers in government appointed committees," Journal of Public Economics, Elsevier, vol. 94(5-6), pages 363-379, June.
  13. Dennis, Richard, 2010. "When is discretion superior to timeless perspective policymaking?," Journal of Monetary Economics, Elsevier, vol. 57(3), pages 266-277, April.
  14. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-98, September.
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  17. Backus, David & Driffill, John, 1986. "The Consistency of Optimal Policy in Stochastic Rational Expectations Models," CEPR Discussion Papers 124, C.E.P.R. Discussion Papers.
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