We assume that central banks can control inflation so that inflation rates reflect the preferences of the central bank council.The hypothesis to be tested is that these preferences depend on the central bankers’ educational and/or professional background. In a panel data analysis for the euro area and eleven countries since 1973,we explain inflation first by the weights which the various educational and professional characteristics occupy in the central bank council and second by the education or profession of the median central bank council member. Our results indicate that, with regard to professional background, former members of the central bank staff as well as former bankers and businessmen have the strongest inflation aversion and that former trade unionists and politicians seem to have the highest inflation preference.As for the education of the council members, our results are less robust. However, if the median member of the central bank council has studied business, the inflation rate is significantly lower than if she has studied economics.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung in its series RWI Discussion Papers with number
0025.
Find related papers by JEL classification: E42 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Monetary Sytsems; Standards; Regimes; Government and the Monetary System E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
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.: