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Governance Structures and Decision-Making Roles in Inflation-Targeting Central Banks

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  • Anita Tuladhar

Abstract

This paper surveys decision-making roles of governing bodies of central banks that have formally adopted inflation targeting as a monetary framework. Governance practices seek to balance institutional independence needed for monetary policy credibility with accountability required to protect democratic values. Central bank laws usually have price stability as the primary monetary policy objective but seldom require an explicit numerical inflation target. Governments are frequently involved in setting targets, but to ensure operational autonomy, legal provisions explicitly limit government influence in internal policy decision-making processes. Internal governance practices differ considerably with regard to the roles and inter-relationships between the policy, supervisory, and management boards of a central bank.

Suggested Citation

  • Anita Tuladhar, 2005. "Governance Structures and Decision-Making Roles in Inflation-Targeting Central Banks," IMF Working Papers 05/183, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:05/183
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    References listed on IDEAS

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    1. Marta Campillo & Jeffrey A. Miron, 1997. "Why Does Inflation Differ across Countries?," NBER Chapters,in: Reducing Inflation: Motivation and Strategy, pages 335-362 National Bureau of Economic Research, Inc.
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    3. Frederic Mishkin & Klaus Schmidt-Hebbel, 2002. "A Decade of Inflation Targeting in the World: What Do We Know and What Do We Need to Know?," Central Banking, Analysis, and Economic Policies Book Series,in: Norman Loayza & Raimundo Soto & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Editor) (ed.), Inflation Targeting: Desing, Performance, Challenges, edition 1, volume 5, chapter 4, pages 171-220 Central Bank of Chile.
    4. Stanley Fischer, 1995. "Modern Approaches to Central Banking," NBER Working Papers 5064, National Bureau of Economic Research, Inc.
    5. Carlo Cottarelli & Curzio Giannini, 1997. "Credibility Without Rules," IMF Occasional Papers 154, International Monetary Fund.
    6. Mark Zelmer & Andrea Schaechter & Mark R. Stone & Alina Carare, 2002. "Establishing Initial Conditions in Support of Inflation Targeting," IMF Working Papers 02/102, International Monetary Fund.
    7. Walsh, Carl E, 1995. "Optimal Contracts for Central Bankers," American Economic Review, American Economic Association, vol. 85(1), pages 150-167, March.
    8. Tomás J. T. Baliño & Charles Enoch & William E. Alexander, 1995. "The Adoption of Indirect Instruments of Monetary Policy," IMF Occasional Papers 126, International Monetary Fund.
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    Cited by:

    1. Q. Akram, 2010. "What horizon for targeting inflation?," Empirical Economics, Springer, vol. 39(3), pages 675-702, December.
    2. Berger, Helge & Nitsch, Volker & Lybek, Tonny, 2008. "Central bank boards around the world: Why does membership size differ?," European Journal of Political Economy, Elsevier, vol. 24(4), pages 817-832, December.
    3. Marcel Peter & Scott Roger & Geoffrey M Heenan, 2006. "Implementing Inflation Targeting; Institutional Arrangements, Target Design, and Communications," IMF Working Papers 06/278, International Monetary Fund.
    4. Scott Roger, 2009. "Inflation Targeting at 20 - Achievements and Challenges," IMF Working Papers 09/236, International Monetary Fund.
    5. Lyonnet, Victor & Werner, Richard, 2012. "Lessons from the Bank of England on ‘quantitative easing’ and other ‘unconventional’ monetary policies," International Review of Financial Analysis, Elsevier, vol. 25(C), pages 94-105.
    6. Dumitriu, Ramona & Stefanescu, Răzvan, 2013. "Decizii strategice ale politicii monetare
      [Strategic decisions of the Monetary Policy]
      ," MPRA Paper 51242, University Library of Munich, Germany, revised 05 Nov 2013.

    More about this item

    Keywords

    Central bank independence; Central banks and their policies; Central banks; Price stability; Monetary policy; Inflation targeting; Governance; inflation; central bank;

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