This paper challenges the time-inconsistency case for central bank independence. It argues that the time-inconsistency literature not only seriously confuses the substance of the rules versus discretion debate, but also posits an implausible view of monetary policy. Most worrisome, the...

In this survey, we critically review the argument for central bank independence (CBI). We argue CBI is neither necessary nor sufficient for reaching monetary stability. First, CBI is just one potentially useful monetary policy design instrument among several. Second, CBI should not be treated as...

This paper provides an overview of central banking arrangements in those European countries that have adopted the euro. Issues addressed include the structure of the “Eurosystem” and its central banking functions, the kind of independence granted to the system and the role of monetary policy...

This paper studies the gain from using money as an indicator when monetary policy in made under data uncertainty. We use a forward and backward looking model, calibrated for the euro area. The policymaker cannot completely observe the state of the economy. Money reveals some of the private...

This paper shows theoretically that inefficient public expenditure can be institutionally curtailed by an independent central bank. An advantage of our analysis is to employ a two-country model with cash-in- advance constraints. The model can deal with fiscal policy as well as monetary policy...

This study attempts to examine the minimum requirements for adopting an inflation targeting framework in Malawi. First, we examined four pre- requisites of an inflation targeting framework: a fairy long track record of low and stable inflation; a degree of independence; having a sole target; and...

This paper reviews central bank legislation in 24 countries in Latin America and the Caribbean during the 1990s. Using panel regressions, the paper finds a negative relationship between legal central bank independence (CBI) and inflation. This result holds for three alternative measures of CBI,...

The trend in manufacturing has not shifted post-91. Liberalisation shares in the high trend phase in manufacturing, that was ushered in after 1981, which continued even after 1991. Liberalisation however, seems to have changed the structure of demand responses of manufacturing output. In...