Central Bank Accountability and Transparency: Theory and Some Evidence
AbstractThe first part of this paper outlines the concept of democratic accountability of central banks, and compares the legal accountability of the European Central Bank (ECB) with some other central banks (Bank of Canada, Bank of Japan, Bank of England and the Federal Reserve System). The second part presents a theory of central bank accountability. Two aspects of accountability are considered: transparency of actual monetary policy and the question of who bears final responsibility for monetary policy. The paper shows that accountability through transparency leads to a lower expected rate of inflation and less stabilization of supply shocks. Accountability through shifting final responsibility in the direction of the government leads to higher inflationary expectations and more stabilization of supply shocks. Copyright 2002 by Blackwell Publishers Ltd.
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Bibliographic InfoPaper provided by Tilburg University in its series Open Access publications from Tilburg University with number urn:nbn:nl:ui:12-86187.
Date of creation: 2000
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Web page: http://www.tilburguniversity.edu/
Other versions of this item:
- Eijffinger, Sylvester C W & Hoeberichts, Marco, 2002. "Central Bank Accountability and Transparency: Theory and Some Evidence," International Finance, Wiley Blackwell, vol. 5(1), pages 73-96, Spring.
- Eijffinger, Sylvester C. W. & Hoeberichts, Marco, 2000. "Central Bank accountability and transparency: theory and some evidence," Discussion Paper Series 1: Economic Studies 2000,06, Deutsche Bundesbank, Research Centre.
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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