The Politics of Monetary Policy

Alberto Alesina and Andrea Stella

Chapter 18 in Handbook of Monetary Economics, 2010, vol. 3, pp 1001-1054 from Elsevier

Abstract: In this paper we critically review the literature on the political economy of monetary policy, with an eye on the questions raised by the recent financial crisis. We begin with a discussion of rules versus discretion. We then examine the issue of the central bank's independence (CBI) both in normal times and in times of crisis. Then we review the literature of electoral manipulation of policies. Finally we address international institutional issues concerning the feasibility, optimality, and political sustainability of currency unions in which more than one country shares the same currency. A brief review of the Euro experience concludes the paper.

Keywords: Monetary Policy Rules; Central Bank Independence; Political Cycles; Currency Unions; The Euro (search for similar items in EconPapers)
JEL-codes: E0 (search for similar items in EconPapers)
Date: 2010
ISBN: 978-0-444-53470-5
References: Add references at CitEc
Citations: View citations in EconPapers (61)

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Working Paper: The Politics of Monetary Policy (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:monchp:3-18

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