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The Economics of Central Banking

In: Contemporary Economic Issues

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  • Alex Cukierman

    (Tel-Aviv University
    Tilburg University)

Abstract

Since 1989, twenty-five countries in different parts of the world have upgraded the legal independence of their central banks very substantially.2 This trend is particularly remarkable in view of the fact that, during the preceding forty years, changes in central bank (CB) legislation were relatively rare.3 In parallel there has been a remarkable upsurge in both theoretical and empirical research on the meaning of central bank independence (CBI), its measurement, the interaction between government and the CB, the effect of CBI on the performance of the economy, the design of optimal contracts for central bankers, the functioning of nominal targets, and the deeper determinants of CBI. This chapter is a broad survey of recent developments in this rapidly growing area. It addresses central banking issues that are relevant for both developed and developing economies.

Suggested Citation

  • Alex Cukierman, 1998. "The Economics of Central Banking," International Economic Association Series, in: Holger C. Wolf (ed.), Contemporary Economic Issues, chapter 3, pages 37-82, Palgrave Macmillan.
  • Handle: RePEc:pal:intecp:978-1-349-26072-0_3
    DOI: 10.1007/978-1-349-26072-0_3
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    References listed on IDEAS

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    More about this item

    Keywords

    Monetary Policy; Central Bank; European Central Bank; Monetary Union; Price Stability;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • 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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