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Governance Structures and Decision-Making Roles in Inflation-Targeting Central Banks

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Author Info
Anita Tuladhar
Abstract

This paper surveys decision-making roles of governing bodies of central banks that have formally adopted inflation targeting as a monetary framework. Governance practices seek to balance institutional independence needed for monetary policy credibility with accountability required to protect democratic values. Central bank laws usually have price stability as the primary monetary policy objective but seldom require an explicit numerical inflation target. Governments are frequently involved in setting targets, but to ensure operational autonomy, legal provisions explicitly limit government influence in internal policy decision-making processes. Internal governance practices differ considerably with regard to the roles and inter-relationships between the policy, supervisory, and management boards of a central bank.

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Paper provided by International Monetary Fund in its series IMF Working Papers with number 05/183.

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Length: 27 pages
Date of creation: 28 Sep 2005
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Handle: RePEc:imf:imfwpa:05/183

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Keywords: Inflation targeting ; Governance ; Central banks ; Price stabilization ; Monetary policy ;

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This paper has been announced in the following NEP Reports: 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.:
  1. Murray Sherwin., 2000. "Institutional frameworks for inflation targeting?," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 63, December. [Downloadable!]
  2. Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-67, March. [Downloadable!] (restricted)
  3. Marta Campillo & Jeffrey A. Miron, 1997. "Why Does Inflation Differ across Countries?," NBER Chapters, in: Reducing Inflation: Motivation and Strategy, pages 335-362 National Bureau of Economic Research, Inc. [Downloadable!]
  4. William E. Alexander & Charles Enoch & Tomás J. T. Baliño, 1995. "The Adoption of Indirect Instruments of Monetary Policy," IMF Occasional Papers 126, International Monetary Fund.
  5. Carlo Cottarelli & Curzio Giannini, 1997. "Credibility Without Rules," IMF Occasional Papers 154, International Monetary Fund.
  6. Alina Carare & Andrea Schaechter & Mark R. Stone & Marc Zelmer, 2002. "Establishing Initial Conditions in Support of Inflation Targeting," IMF Working Papers 02/102, International Monetary Fund. [Downloadable!]
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Cited by:
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  1. Marcel Peter & Geoffrey Heenan & Scott Roger, 2006. "Implementing Inflation Targeting: Institutional Arrangements, Target Design, and Communications," IMF Working Papers 06/278, International Monetary Fund. [Downloadable!]
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