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Policy Uncertainty and Economic Reforms in a Monetary Union

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  • Carsten Hefeker

Abstract

The paper analyzes the relation between monetary uncertainty and government incentives to implement economic reforms in order to reduce structural distortions and make economies more flexible. It is shown that uncertainty about the central bank’s behavior leads to more reforms. I relate this result to the debate about central bank structure in a larger European monetary union.
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  • Carsten Hefeker, 2011. "Policy Uncertainty and Economic Reforms in a Monetary Union," German Economic Review, Verein für Socialpolitik, vol. 12(3), pages 274-285, August.
    • Handle: RePEc:bla:germec:v:12:y:2011:i:3:p:274-285
    DOI: j.1468-0475.2010.00522.x
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    1. Alan S. Blinder & Michael Ehrmann & Marcel Fratzscher & Jakob De Haan & David-Jan Jansen, 2008. "Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence," Journal of Economic Literature, American Economic Association, vol. 46(4), pages 910-945, December.
    2. Demertzis, Maria & Hughes Hallett, Andrew, 2007. "Central Bank transparency in theory and practice," Journal of Macroeconomics, Elsevier, vol. 29(4), pages 760-789, December.
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    6. Carsten Hefeker, 2008. "Uncertainty And Wage Setting In A Monetary Union," Manchester School, University of Manchester, vol. 76(4), pages 391-404, July.
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    Cited by:

    1. Carsten Hefeker & Michael Neugart, 2014. "The Influence of Central Bank Transparency on Labor Market Regulation," Manchester School, University of Manchester, vol. 82(1), pages 17-32, January.
    2. Louis Jaeck & Sehjeong Kim, 2014. "The Impact of EMU Enlargement on Structural Reforms: A Political Economy Approach," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 20(1), pages 73-86, February.

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