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Introducing Instruments of Central Bank Accountability in a Monetary Union

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  • Katrin Ullrich

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Abstract

With an increasing number of independent central banks, accountability of central banks is also getting more attention. This paper analyses the possibility of introducing instruments of central bank accountability in a monetary union. In our model, monetary policy is influenced by the governments of the member states according to the degree of independence granted to the central bank. Instruments of democratic accountability are introduced which generate different expected losses for a government. The amount of the expected loss will determine the approval of a government to the implementation of a particular mechanism. We show that the agreement between the governments will only be unanimous for the definition of the inflation target of the central bank. Copyright Springer Science+Business Media, LLC 2007

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File URL: http://hdl.handle.net/10.1007/s11079-007-9045-5
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Bibliographic Info

Article provided by Springer in its journal Open Economies Review.

Volume (Year): 18 (2007)
Issue (Month): 3 (July)
Pages: 239-262

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Handle: RePEc:kap:openec:v:18:y:2007:i:3:p:239-262

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Web page: http://www.springerlink.com/link.asp?id=100323

Related research

Keywords: Independence; Accountability; Monetary union; E52; E58;

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References

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  1. Bevger, H. & Haan, J. de & Eijffinger, S.C.W., 2000. "Central Bank Independence: An Update of Theory and Evidence," Open Access publications from Tilburg University urn:nbn:nl:ui:12-82768, Tilburg University.
  2. Eijffinger, S.C.W. & Hoeberichts, M.M., 2000. "Central Bank Accountability and Transparency: Theory and Some Evidence," Open Access publications from Tilburg University urn:nbn:nl:ui:12-86187, Tilburg University.
  3. francesca castellani, 2002. "A Model of Central Bank's Accountability," IHEID Working Papers 04-2002, Economics Section, The Graduate Institute of International Studies.
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  8. Eijffinger, S. & De Hann, J., 1995. "The Political Economy of Central Bank Independence," Papers 9587, Tilburg - Center for Economic Research.
  9. Eijffinger, S.C.W. & Haan, J. de, 2000. "European Monetary and Fiscal Policy," Open Access publications from Tilburg University urn:nbn:nl:ui:12-82796, Tilburg University.
  10. Clive Briault & Andrew Haldane & Mervyn King, 1996. "Independence and Accountability," Bank of England working papers 49, Bank of England.
  11. Francesca Castellani, 2001. "Central Bank Independence and Accountability Under Complete Information," IHEID Working Papers 05-2001, Economics Section, The Graduate Institute of International Studies.
  12. Dixit, Avinash, 2000. "A Repeated Game Model of Monetary Union," Economic Journal, Royal Economic Society, vol. 110(466), pages 759-80, October.
  13. Petra M. Geraats, 2002. "Central Bank Transparency," Economic Journal, Royal Economic Society, vol. 112(483), pages 532-565, November.
  14. Manfred Neumann, 2002. "Transparency in monetary policy," Atlantic Economic Journal, International Atlantic Economic Society, vol. 30(4), pages 353-365, December.
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Cited by:
  1. Alexander Mihailov & Katrin Ullrich, 2008. "Independence and Accountability of Monetary and Fiscal Policy Committees," Economics & Management Discussion Papers em-dp2008-72, Henley Business School, Reading University.

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