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Credibility and Flexibility with Monetary Policy Committees

  • Ilian Mihov

    (INSEAD
    CEPR)

  • Anne Sibert

    (Birkbeck College, University of London
    CEPR)

We consider independent monetary policy committees as a simple way of attaining relatively low inflation without completely sacrificing an activist role of monetary policy. If central banker¡¦s types are unknown, then for a wide range of parameters an independent monetary policy committee is better than either a mandated zero-inflation rule or discretionary policy conducted by an opportunistic central banker.

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Paper provided by Hong Kong Institute for Monetary Research in its series Working Papers with number 232002.

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Length: 25 pages
Date of creation: Dec 2002
Date of revision:
Handle: RePEc:hkm:wpaper:232002
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  12. Vickers, John, 1986. "Signalling in a Model of Monetary Policy with Incomplete Information," Oxford Economic Papers, Oxford University Press, vol. 38(3), pages 443-55, November.
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  19. Waller, Christopher J., 1992. "A bargaining model of partisan appointments to the central bank," Journal of Monetary Economics, Elsevier, vol. 29(3), pages 411-428, June.
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