Independence Before Conservatism: Transparency, Politics and Central Bank Design

Andrew Hughes Hallett and Weymark Diana N.
Additional contact information
Weymark Diana N.: Vanderbilt University, Nashville,Tennessee, United States of America

German Economic Review, 2005, vol. 6, issue 1, 1-21

Abstract: The problem of monetary policy delegation is formulated as a two-stage game between the government and the central bank. In the first stage the government chooses the institutional design of the central bank. Monetary and fiscal policy are implemented in the second stage. When fiscal policy is taken into account, there is a continuum of combinations of central bank independence and conservatism that produce optimal outcomes. This indeterminacy is resolved by appealing to practical considerations. In particular, it is argued that full central bank independence facilitates the greatest degree of policy transparency and political coherence.

Keywords: Central bank independence; central bank conservatism; monetary policy delegation; transparency; policy coherence (search for similar items in EconPapers)
Date: 2005
References: Add references at CitEc
Citations: View citations in EconPapers (41)

Downloads: (external link)
https://doi.org/10.1111/j.1465-6485.2005.00119.x (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Journal Article: Independence Before Conservatism: Transparency, Politics and Central Bank Design (2005)
Working Paper: Independence before Conservatism: Transparency, Politics and Central Bank Design (2002)
Working Paper: Independence Before Conservatism: Transparency, Politics, and Central Bank Design (2002)
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:bpj:germec:v:6:y:2005:i:1:p:1-21

Ordering information: This journal article can be ordered from
https://www.degruyter.com/journal/key/ger/html

DOI: 10.1111/j.1465-6485.2005.00119.x

Access Statistics for this article

German Economic Review is currently edited by Peter Egger, Almut Balleer, Jesus Crespo-Cuaresma, Mario Larch, Aderonke Osikominu and Georg Wamser

More articles in German Economic Review from De Gruyter
Bibliographic data for series maintained by Peter Golla ().