IDEAS home Printed from
MyIDEAS: Log in (now much improved!) to save this article

Kredibilita a reputace měnové politiky
[Credibility and reputation of monetary policy]

Listed author(s):
  • Paul Levine

The article presents a survey of theory concerning the "credibility" and "reputation" issues until the beginning of the 1990s, when new concept of "central bank independence" emerged. The "credibility problem" described by Kydland and Prescott means, that optimal policies become sub-optimal with the passage of time, which is called "time inconsistency". When the government or monetary authority change formerly optimal policy rules, the "forward - looking" private sector can anticipate it so that time inconsistent policies lack credibility. This problem can be analysed in terms of a complete-information game between the policy-maker and the private sector. According to Barro and Gordon the policy-maker's concern for his/her reputation for precommitment can sustain the ex ante optimal policy. Canzoneri introduces imperfect monitoring of monetary policy, using a model with stochastic disturbances, which gives almost the same conclusions. Studies by Backus and Driffill, Barro, Vickers or Cukierman and Meltzer represent more or less departure from the extreme assumption of complete-information, and solve finite-time-horizon games. The main result is that uncertainity of the private sector regarding the behaviour of government or monetary authority can be sufficient to sustain the optimal policy for much of the finite time for which the game is played.

If you experience problems downloading a file, check if you have the proper application to view it first. 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.

File URL:
Download Restriction: free of charge

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Article provided by University of Economics, Prague in its journal Politická ekonomie.

Volume (Year): 1999 (1999)
Issue (Month): 1 ()

in new window

Handle: RePEc:prg:jnlpol:v:1999:y:1999:i:1:id:7
Contact details of provider: Postal:
nam. W. Churchilla 4, 130 67 Praha 3

Phone: (02) 24 09 51 11
Fax: (02) 24 22 06 57
Web page:

More information through EDIRC

Order Information: Postal: Redakce Politické ekonomie, Vysoká škola ekonomická, nám. W. Churchilla 4, 130 67 Praha 3
Web: Email:

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:prg:jnlpol:v:1999:y:1999:i:1:id:7. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frantisek Sokolovsky)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.