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Independence and Accountability

Author

Listed:
  • Clive Briault
  • Andrew Haldane
  • Mervyn King

Abstract

Why have central banks become more accountable and transparent in recent years? This paper considers a set of analytical models of monetary policy institutions to shed light on this. One conclusion it reaches is that uncertainty - regarding the central bank's inflation preferences or about the underlying model of the world - can generate inflationary problems which transparency can help counteract. This offers one rationale for the current monetary policy framework in the UK. The paper also constructs a quantitative index of accountability. This suggests that transparency has been pursued most actively by central banks with little independence and a low accrued stock of credibility. Again, this chimes with UK experience. A shorter version of this paper is forthcoming in "Toward more effective Monetary Policy" - proceedings of the Seventh Internal Conference sponsored by the Bank of Japan's Institute for Monetary and Economic Studies.

Suggested Citation

  • Clive Briault & Andrew Haldane & Mervyn King, 1996. "Independence and Accountability," Bank of England working papers 49, Bank of England.
    • Handle: RePEc:boe:boeewp:49
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    File URL: http://www.bankofengland.co.uk/archive/Documents/historicpubs/workingpapers/1996/wp49.pdf
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    References listed on IDEAS

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