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La Banque centrale et l'Union monétaire européennes : les tribulations de la crédibilité

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  • Jérôme Creel
  • Jacky Fayolle

Abstract

Discussing credibility basing upon the Barro-Gordon model, we change the framework substituting workers with financial markets. Results show without surprise that a central bank willing to gain credibility should set inflation at a low level during a long period to lead expectations towards this level. This explains the adoption by the ECB of a low price stability target. The multiple-equilibria nature of the model necessitates that monetary policy should be implemented in coordination with governments. Of course, the Euro area is still heterogeneous, so that the ECB should adopt a ??structural?? rather than ??monetarist?? representation of the European economy, at least because European monetary aggregates have no homogenous counterparts in the European money demand. The ECB would concentrate on the global and diversified impact of the interest rate rather than on the illusory control of a monetary aggregate. JEL codes ?: E52, E58.

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  • Jérôme Creel & Jacky Fayolle, 2002. "La Banque centrale et l'Union monétaire européennes : les tribulations de la crédibilité," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 211-244.
  • Handle: RePEc:cai:reofsp:reof_074_0211
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    Cited by:

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    2. Miniaoui, Héla & Smida, Mounir, 2008. "Crédibilité des autorités monétaires et transparence – Quelle complémentarité dans le cas de la Tunisie? Une contribution au débat," L'Actualité Economique, Société Canadienne de Science Economique, vol. 84(2), pages 205-234, juin.
    3. Matteo Luciani, 2004. "A VAR Model for the Analysis of the Effects of Monetary Policy in the Euro Area," Rivista di Politica Economica, SIPI Spa, vol. 94(6), pages 175-214, November-.
    4. Jérôme Creel & Jacky Fayolle, 2002. "La Banque Centrale Européenne ou le Seigneur des euros," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 175-210.
    5. repec:spo:wpecon:info:hdl:2441/3004 is not listed on IDEAS

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    More about this item

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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