The Politics of Monetary Policy

Alberto Alesina and Andrea Stella

No 15856, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of Central Banks independence both in normal times, in times of crisis. Then we review the literature of electoral manipulation of policies. Finally we address international institutional issues concerning the feasibility, optimality and political sustainability of currency unions in which more than one country share the same currency. A brief review of the Euro experience concludes the paper.

JEL-codes: E52 (search for similar items in EconPapers)
Date: 2010-04
New Economics Papers: this item is included in nep-cba, nep-hpe, nep-mac, nep-mon and nep-pol
Note: POL
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (86)

Published as Alesina, Alberto, Andrea Stella, B Friedman, and M Woodford. 2011. The Politics of Monetary Policy. In Handbook of Monetary Economics, Ch. 8 1000-1054. Amsterdam: North Holland.

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Chapter: The Politics of Monetary Policy (2010)
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