Advanced Search
MyIDEAS: Login to save this article or follow this journal

A Post Keynesian view of central bank independence, policy targets, and the rules versus discretion debate

Contents:

Author Info

  • L. Randall Wray

Abstract

This paper addresses three monetary policy issues—policy independence, choice of targets, and rules versus discretion. According to the new monetary consensus, the central bank needs policy independence to build credibility, the operating target is the overnight interbank lending rate, and the ultimate goal is price stability. An alternative view is presented, arguing that an effective central bank cannot be independent as conventionally defined, where effectiveness is indicated by the ability to hit an overnight nominal interest rate target. Discretionary policy and conventional views of central bank ability to achieve traditional goals such as robust growth, low inflation, or high employment are rejected. Thus, the paper returns to Keynes's call for low interest rates and euthanasia of the rentier.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://mesharpe.metapress.com/link.asp?target=contribution&id=F432256K10373451
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by M.E. Sharpe, Inc. in its journal Journal of Post Keynesian Economics.

Volume (Year): 30 (2007)
Issue (Month): 1 (October)
Pages: 119-141

as in new window
Handle: RePEc:mes:postke:v:30:y:2007:i:1:p:119-141

Contact details of provider:
Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=109348

Related research

Keywords: central bank independence; Keynes; monetary policy targets; Post Keynesian theory; rules versus discretion;

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Cottrell, Allin, 1994. "Keynes and the Keynesians on the Fisher Effect," Scottish Journal of Political Economy, Scottish Economic Society, vol. 41(4), pages 416-33, November.
  2. Marc Lavoie, 2002. "Interest parity, risk premia, and Post Keynesian analysis," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., M.E. Sharpe, Inc., vol. 25(2), pages 237-249, December.
  3. Dimitri B. Papadimitriou & L. Randall Wray, . "Targeting Inflation, The Effects of Monetary Policy on the CPI and Its Housing Component," Economics Public Policy Brief Archive ppb_27, Levy Economics Institute.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Mark Setterfield, 2013. "Using Interest Rates as the Instrument of Monetary Policy: Beware Real effects, Positive Feedbacks, and Discontinuities," Working Papers, Trinity College, Department of Economics 1320, Trinity College, Department of Economics.
  2. Emiliano Brancaccio & Giuseppe Fontana, 2013. "'Solvency rule' versus 'Taylor rule': an alternative interpretation of the relation between monetary policy and the economic crisis," Cambridge Journal of Economics, Oxford University Press, Oxford University Press, vol. 37(1), pages 17-33.
  3. Hein, Eckhard & Schoder, Christian, 2009. "Interest rates, distribution and capital accumulation: A Post-Kaleckian perspective on the US and Germany," IPE Working Papers 04/2009, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
  4. repec:hal:wpaper:halshs-00496911 is not listed on IDEAS
  5. Hiroshi Nishi, 2012. "Varieties of Economic Growth Regimes, Types of Macroeconomic Policies, and Policy Regime: A Post-Keynesian Analysis," Discussion papers e-12-008, Graduate School of Economics Project Center, Kyoto University.
  6. Jairo Parada Corrales & Cristina Albor Cepeda, 2011. "La mitología del banco central independiente," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, Universidad Externado de Colombia - Facultad de Economía, vol. 13(24), pages 465-472, January-J.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:mes:postke:v:30:y:2007:i:1:p:119-141. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Chris Nguyen).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.