The political economy of monetary policy conduct and central bank design

Manfred Gärtner ()

University of St. Gallen Department of Economics working paper series 2006 from Department of Economics, University of St. Gallen

Abstract: This paper provides a concise overview of the state of the art on monetary policy and central banking from a public choice perspective. It starts with a brief look at the roots of today’s view of monetary policy conduct and the design of pertinent institutions in early work on political business cycles, and then proceeds to a discussion of the inflationstabilization dilemma along with proposed solutions in the form of central bank independence and conservativeness, incentive contracts, and inflation policy targets. The last section addresses current developments. These include the proper choice of monetary policy targets, the role of New Keynesian and sticky-information aggregate-supply curves and the quest for simple and efficient rules for monetary policy that has been triggered by the proposal and widespread polularity of the Taylor rule.

Keywords: Monetary policy; central banking; rules; discretion; stabilization; inflation; bias; public choice (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 E58 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2006-10
New Economics Papers: this item is included in nep-cba, nep-mac, nep-mon and nep-pol
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://ux-tauri.unisg.ch/RePEc/usg/dp2006/DP25_Ga.pdf (application/pdf)

Related works:
Chapter: The Political Economy of Monetary Policy Conduct and Central Bank Design (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:usg:dp2006:2006-25

Access Statistics for this paper

More papers in University of St. Gallen Department of Economics working paper series 2006 from Department of Economics, University of St. Gallen Contact information at EDIRC.
Bibliographic data for series maintained by Joerg Baumberger ( this e-mail address is bad, please contact ).