Credibility and Flexibility with Monetary Policy Committees

Anne Sibert and Ilian Mihov

No 3278, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We consider independent monetary policy committees as a simple way of attaining relatively low inflation without completely sacrificing the stabilization role of monetary policy. If central banker's types are unknown, then for a wide range of parameters an independent monetary policy committee is better than either a mandated zero-inflation rule or discretionary policy conducted by an opportunistic central banker.

Keywords: Monetary policy committee; Reputation; Output stabilization; Inflationary bias (search for similar items in EconPapers)
JEL-codes: E42 E52 E58 (search for similar items in EconPapers)
Date: 2002-03
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (10)

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