This paper introduces a parameter for central bank independence in a monetary policy game with a conservative central banker. It tries to explain the optimal degree of central bank independence and conservativeness by four economic and political determinants, both theoretically and empirically. There appears to be a trade-off between central bank independence and conservativeness. Then, by comparing the optimal degree of conservativeness and independence with the actual degree of independence, the authors want to identify the optimal degree of conservativeness for twelve member states of the European Union. Copyright 1998 by Royal Economic Society.
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Volume (Year): 50 (1998) Issue (Month): 3 (July) Pages: 397-411 Download reference. The following formats are available: HTML
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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.:
Aigner, Dennis J. & Hsiao, Cheng & Kapteyn, Arie & Wansbeek, Tom, 1984.
"Latent variable models in econometrics,"
Handbook of Econometrics,
in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 23, pages 1321-1393
Elsevier.
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Alberto Alesina, 1988.
"Macroeconomics and Politics,"
NBER Chapters,
in: NBER Macroeconomics Annual 1988, Volume 3, pages 13-62
National Bureau of Economic Research, Inc.
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