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Monetary policy goals and central bank independence

Author

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  • M.A. AKHTAR

    (Federal Reserve Bank of New York)

Abstract

During recent years a strong body of academic literature has argued that central bank independence (CBI) is necessary in order to achieve and maintain low inflation. This appears to support the view of central bankers that they should have the autonomy to pursue policy objectives without being pressured by short-term political objectives. The treatment of policy goals and the issue of policymakers' inflationary bias within CBI models are reviewed.

Suggested Citation

  • M.A. Akhtar, 1995. "Monetary policy goals and central bank independence," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 48(195), pages 423-439.
    • Handle: RePEc:psl:bnlaqr:1995:43
    as

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    File URL: http://ojs.uniroma1.it/index.php/PSLQuarterlyReview/article/view/10499/10386
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    References listed on IDEAS

    as
    1. Barro, Robert J & Gordon, David B, 1983. "A Positive Theory of Monetary Policy in a Natural Rate Model," Journal of Political Economy, University of Chicago Press, vol. 91(4), pages 589-610, August.
    2. Posen, Adam, 1998. "Central Bank Independence and Disinflationary Credibility: A Missing Link?," Oxford Economic Papers, Oxford University Press, vol. 50(3), pages 335-359, July.
    3. Henry Kaufman, 1994. "Structural changes in the financial markets: economic and policy significance," Economic Review, Federal Reserve Bank of Kansas City, vol. 79(Q II), pages 5-15.
    4. 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 151-162, May.
    5. M. Akbar Akhtar & Howard Howe, 1991. "The political and institutional independence of U.S. monetary policy," Research Paper 9110, Federal Reserve Bank of New York.
    6. Stephen G. Cecchetti, 1995. "Inflation Indicators and Inflation Policy," NBER Chapters, in: NBER Macroeconomics Annual 1995, Volume 10, pages 189-236, National Bureau of Economic Research, Inc.
    7. C.P. Kindleberger, 1995. "Asset inflation and monetary policy," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 17-37.
    8. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," The World Bank Economic Review, World Bank, vol. 6(3), pages 353-398, September.
    9. Fischer, Stanley, 1995. "Central-Bank Independence Revisited," American Economic Review, American Economic Association, vol. 85(2), pages 201-206, May.
    10. C.P. Kindleberger, 1995. "Asset inflation and monetary policy," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 48(192), pages 17-37.
    11. Cukierman, Alex, 1994. "Central Bank Independence and Monetary Control," Economic Journal, Royal Economic Society, vol. 104(427), pages 1437-1448, November.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. King Banaian, 2008. "Measuring Central Bank Independence: Ordering, Ranking, or Scoring?," Palgrave Macmillan Books, in: King Banaian & Bryan Roberts (ed.), The Design and Use of Political Economy Indicators, chapter 0, pages 33-55, Palgrave Macmillan.
    2. J. De Haan & W. Kooi, 1997. "What really matters: conservativeness or independence?," Banca Nazionale del Lavoro Quarterly Review, Banca Nazionale del Lavoro, vol. 50(200), pages 23-38.
    3. Brian Snowdon & Howard R. Vane, 1999. "The New Political Macroeconomics: An Interview with Alberto Alesina," The American Economist, Sage Publications, vol. 43(1), pages 19-34, March.
    4. Nicola Acocella, "undated". "A tale of two cities: exit policies in Washington and Frankfurt," Working Papers 117/13, Sapienza University of Rome, Metodi e Modelli per l'Economia, il Territorio e la Finanza MEMOTEF.

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    More about this item

    Keywords

    Decision-making; Models; Decision making; Evaluation; Monetary policy;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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