Designing the optimal conservativeness of the central bank

Montserrat Ferré and Carolina Manzano ()

Economics Bulletin, 2012, vol. 32, issue 2, 1461-1473

Abstract: We propose an indicator of the degree of conservativeness of an independent central bank and we derive its optimal social value. We show that from a normative perspective, one can either design a central bank that cares about public spending or that it does not -but in the latter case the optimal weight on output stabilization would have to be higher and the central bank would be less conservative in the Rogoff sense.

Keywords: Central bank; conservativeness; independence. (search for similar items in EconPapers)
JEL-codes: E5 E6 (search for similar items in EconPapers)
Date: 2012-05-15
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Designing the Optimal Conservativeness of the Central Bank (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ebl:ecbull:eb-12-00251

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