Is there a self-enforcing monetary constitution?

Alexander Salter

Constitutional Political Economy, 2014, vol. 25, issue 3, 280-300

Abstract: A self-enforcing monetary constitution has rules that agents acting within the system will uphold even in the presence of deviations from ideal knowledge and complete benevolence. It thus does not require external enforcement. What would such a constitution look like? I show that two regimes—a version of nominal gross domestic product targeting that relies on market implementation of monetary policy, and free banking—meet these requirements for self-enforcing monetary constitutions. The analysis draws insights from political economy, and from constitutional political economy in particular. Copyright Springer Science+Business Media New York 2014

Keywords: Central banking; Constitutional political economy; Free banking; Monetary constitution; NGDP targeting; Robust political economy; B53; E42; E52; P16 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (21)

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DOI: 10.1007/s10602-014-9163-1

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