Designing the Optimal Conservativeness of the Central Bank
In this paper we propose a new measure of the degree of conservativeness of an inde- pendent central bank and we derive the optimal value from the social welfare perspective. We show that the mere appointment of an independent central bank is not enough to achieve lower inflation, which may explain the mixed results found between central bank independence and inflation in the empirical literature. Further, the optimal central bank should not be too conservative. For instance, we will show that in some circumstances it will be optimal that the central bank is less conservative than society in the Rogoff sense. JEL classification: E58, E63. Keywords: Central bank; Conservativeness; Independence.
|Date of creation:||2011|
|Date of revision:|
|Contact details of provider:|| Postal: Avda. de la Universitat,1 - 43204 Reus (Tarragona)|
Phone: 977 75 98 00
Fax: 977 75 98 10
Web page: http://www.urv.cat
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wyplosz, Charles, 1997.
"EMU: Why and How It Might Happen,"
CEPR Discussion Papers
1685, C.E.P.R. Discussion Papers.
- de Haan, Jakob, 1997.
"The European Central Bank: Independence, Accountability and Strategy: A Review,"
Springer, vol. 93(3-4), pages 395-426, December.
- Jakob de Haan, 1997. "The European Central Bank: Independence, accountability and strategy: A review," Public Choice, Springer, vol. 93(3), pages 395-426, December.
- Bovenberg, A.L. & Beetsma, R.M.W.J., 1997.
"Central Bank independence and public debt policy,"
Other publications TiSEM
d1fc1375-507c-445b-9b38-d, Tilburg University, School of Economics and Management.
- Alex Cukierman, 2006.
"Central Bank Independence And Monetary Policy Making Institutions: Past, Present, And Future,"
Journal Economía Chilena (The Chilean Economy),
Central Bank of Chile, vol. 9(1), pages 5-23, April.
- Cukierman, Alex, 2008. "Central bank independence and monetary policymaking institutions -- Past, present and future," European Journal of Political Economy, Elsevier, vol. 24(4), pages 722-736, December.
- Alex Cukierman, 2007. "Central Bank Independence and Monetary Policymaking Institutions: Past, Present, and Future," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 54(4), pages 367-395, December.
- Cukierman, Alex, 2007. "Central Bank Independence and Monetary Policymaking Institutions - Past Present and Future," CEPR Discussion Papers 6441, C.E.P.R. Discussion Papers.
- Alex Cukierman, 2006. "Central Bank Independence and Monetary Policymaking Institutions: Past, Present, and Future," Working Papers Central Bank of Chile 360, Central Bank of Chile.
- Alesina, Alberto & Stella, Andrea, 2010.
"The Politics of Monetary Policy,"
Handbook of Monetary Economics,
in: Benjamin M. Friedman & Michael Woodford (ed.), Handbook of Monetary Economics, edition 1, volume 3, chapter 18, pages 1001-1054
- Avinash Dixit & Luisa Lambertini, 2003.
"Interactions of Commitment and Discretion in Monetary and Fiscal Policies,"
Boston College Working Papers in Economics
575, Boston College Department of Economics.
- Avinash Dixit & Luisa Lambertini, 2003. "Interactions of Commitment and Discretion in Monetary and Fiscal Policies," American Economic Review, American Economic Association, vol. 93(5), pages 1522-1542, December.
- Scheve, Kenneth, 2004. "Public Inflation Aversion and the Political Economy of Macroeconomic Policymaking," International Organization, Cambridge University Press, vol. 58(01), pages 1-34, February.
- Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2001.
" Central Bank Independence: An Update of Theory and Evidence,"
Journal of Economic Surveys,
Wiley Blackwell, vol. 15(1), pages 3-40, February.
- Berger, Helge & de Haan, Jakob & Eijffinger, Sylvester C W, 2000. "Central Bank Independence: An Update of Theory and Evidence," CEPR Discussion Papers 2353, C.E.P.R. Discussion Papers.
- Alesina, Alberto & Tabellini, Guido, 1987. "Rules and Discretion with Noncoordinated Monetary and Fiscal Policies," Economic Inquiry, Western Economic Association International, vol. 25(4), pages 619-30, October.
- Christopher Crowe & Ellen E. Meade, 2007. "The Evolution of Central Bank Governance around the World," Journal of Economic Perspectives, American Economic Association, vol. 21(4), pages 69-90, Fall.
When requesting a correction, please mention this item's handle: RePEc:urv:wpaper:2072/179623. 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: (Ariadna Casals)
If references are entirely missing, you can add them using this form.