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Designing a Central Bank for Europe: A Cautionary Tale from the Early Years of the Federal Reserve System

Eichengreen, Barry - C.E.P.R. Discussion Papers - 1991

Important questions concerning the structure and operation of a European Central Bank remain unanswered. Although there exists no precedent for the process of institution-building in which the European Community is currently engaged, the founding and early operations of the Federal Reserve...

Persistent link: https://www.econbiz.de/10005791345

Time Consistency When Open Market Operations are the Monetary Policy Instrument: Is There Really a Deflation Bias?

Rankin, Neil - C.E.P.R. Discussion Papers - 2001

We re-examine optimal monetary policy in a dynamic general equilibrium model where open market operations are the only policy instrument. The government optimizes purely over private agents’ welfare. We use a money-in-the-utility-function approach with a welfare cost of ‘current’...

Persistent link: https://www.econbiz.de/10005661830

Foreign Exchange Intervention, Policy Objectives and Macroeconomic Stability

Vitale, Paolo - C.E.P.R. Discussion Papers - 2001

Within a simple model of monetary policy for an open economy, we study how foreign exchange intervention may be used to condition agents' beliefs of the objectives of the policymakers. Differently from cheap talk foreign exchange intervention guarantees a unique equilibrium. Foreign exchange...

Persistent link: https://www.econbiz.de/10005124447

Is Central Bank Transparency Desirable?

Sibert, Anne - C.E.P.R. Discussion Papers - 2006

I analyse central bank transparency when the central bank's objective function is its private information. Non-transparency exists when the public does not observe the action of the central bank and an unobservable component of the inflation-control error keeps the public from using its...

Persistent link: https://www.econbiz.de/10005656252

First Impressions Matter: Signalling as a Source of Policy Dynamics

Hansen, Stephen; McMahon, Michael - C.E.P.R. Discussion Papers - 2013

We provide the first direct empirical support for the relevance of signalling in monetary policy. In our dynamic model …. Signalling leads all bankers to be tougher on inflation initially, but to become less tough with experience. This evolution is … structurally estimate the model using Bank of England data and confirm both predictions. Signalling increases the probability new …

Persistent link: https://www.econbiz.de/10011084410

Monetary Policy With Uncertain Central Bank Preferences

Sibert, Anne - C.E.P.R. Discussion Papers - 2001

?This Paper considers monetary policy when the weight policy makers put on output loss relative to inflation is their private information. I show that in the first period of a two-period term, all policy makers but the least inflation averse inflate less – but respond more to shocks – than...

Persistent link: https://www.econbiz.de/10005661789

Monetary transmission in low income countries

Mishra, Prachi; Montiel, Peter J; Spilimbergo, Antonio - C.E.P.R. Discussion Papers - 2010

This paper reviews the monetary transmission mechanism in low income countries (LICs). We use monetary transmission in advanced and emerging markets as a benchmark to identify aspects of the transmission mechanism that may operate differently in LICs. In particular, we focus on the effects of...

Persistent link: https://www.econbiz.de/10008466328

Bidding and Performance in Repo Auctions: Evidence from ECB Open Market Operations

Bindseil, Ulrich; Nyborg, Kjell G; Strebulaev, Ilya - C.E.P.R. Discussion Papers - 2004

Repo auctions are multiunit auctions regularly used by central banks to inject liquidity into the banking sector. Banks have a fundamental need to participate because they have to satisfy reserve requirements. Superficially, repo auctions resemble treasury auctions; the format and rules are...

Persistent link: https://www.econbiz.de/10005067452

A Model of the Open Market Operations of the European Central Bank

Ayuso, Juan; Repullo, Rafael - C.E.P.R. Discussion Papers - 2000

We construct a model to analyse the two types of tender procedures used by the European Central Bank (ECB) in its open market operations. We assume that the ECB minimizes the expected value of a loss function that depends on the quadratic difference between the interbank rate and a target...

Persistent link: https://www.econbiz.de/10005504412

On the Evolution of Credibility and Flexible Exchange Rate Target Zones

Avesani, Renzo; Gallo, Giampiero M; Salmon, Mark - C.E.P.R. Discussion Papers - 1995

the operation of a target zone as a dynamic signalling game between the monetary authorities and the financial markets. A …

Persistent link: https://www.econbiz.de/10005123996

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