Economics at your fingertips  

Credibility of Optimal Monetary Delegation

Henrik Jensen ()

American Economic Review, 1997, vol. 87, issue 5, 911-20

Abstract: While optimal monetary policy is subject to a credibility problem, it is often argued that the government should appoint a central banker whose incentives differ from the government's. The author argues, however, that such delegation does not overcome credibility problems given that delegation is discretionary and without costs. 'Reappointment costs' of delegation are shown to improve suboptimal outcomes but credibility of optimal monetary policy turns out be worsened. At best, delegation therefore has no effects on credibility, but only if reappointment has no costs. Copyright 1997 by American Economic Association.

Date: 1997
References: Add references at CitEc
Citations: View citations in EconPapers (68) Track citations by RSS feed

Downloads: (external link) ... O%3B2-9&origin=repec full text (application/pdf)
Access to full text is restricted to JSTOR subscribers. See for details.

Related works:
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:

Ordering information: This journal article can be ordered from

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().

Page updated 2020-09-22
Handle: RePEc:aea:aecrev:v:87:y:1997:i:5:p:911-20