Territorial appointees to an independent central bank (e.g. District Federal Reserve Banks’ presidents, Governors of national central banks at the ECB’s Governing Council) are liable to confront a “role conflict” stemming from a duality of loyalties and allegiances - to the home regional...

In this paper we consider a standard policy game between the Government and a union. In such a framework, we first investigate the effects of corporatism on macroeconomic performance vis-à-vis different kinds of non-co-operative equilibria. Afterwards, we introduce in the literature the issue...

The monetary system in Estonia is based on the currency board arrangement with German Mark. The strong commitments and rule-based features of currency board imply that there is no active monetary policy in Estonia – all necessarily monetary djustments are left to the market forces. Under fixed...

This paper examines the optimal frequency of monetary policy meetings when their schedule is pre-announced. Our contribution is twofold. First, we show that in the standard New Keynesian framework infrequent but periodic revision of monetary policy may be desirable even when there are no...

This paper quantifies transparency of monetary policy in the three EU New Member States that have adopted direct inflation targeting strategy. Two measures of transparency are applied. The institutional measure reflects the extent to which a central bank discloses information that is related to...

This paper applies the robust control approach to a simple positive theory of monetary policy, when the central bank’s model of the economy is subject to misspecifications. It is shown that a central bank should react more aggressively to supply shocks when the model misspecifications grow...

This paper investigates the empirical relevance of a new framework for monetary policy analysis in which the decision makers are allowed to weight differently positive and negative deviations of inflation and output from the target values. Reduced-form and structural estimates of the central...

This paper considers the position of national central banks within the ESCB. The funda-mental framework underlying the ESCB is that of a system of central banks in which component institutions are individually and collectively responsible for carrying out vari-ous tasks. Within this framework,...

This paper studies the transmission of common monetary shocks across European countries by using a dynamic factor model (Forni-Reichlin (1998)). This technique allows to extract the common European monetary shock and to compute country-specific responses. Our identification employs rotations of...