The Politics of Monetary Policy
AbstractIn this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of Central Banks independence both in normal times, in times of crisis. Then we review the literature of electoral manipulation of policies. Finally we address international institutional issues concerning the feasibility, optimality and political sustainability of currency unions in which more than one country share the same currency. A brief review of the Euro experience concludes the paper.
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Date of creation: Apr 2010
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- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-11 (All new papers)
- NEP-CBA-2010-04-11 (Central Banking)
- NEP-HPE-2010-04-11 (History & Philosophy of Economics)
- NEP-MAC-2010-04-11 (Macroeconomics)
- NEP-MON-2010-04-11 (Monetary Economics)
- NEP-POL-2010-04-11 (Positive Political Economics)
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