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(CBI) and transparency (CBT), converged towards that of the advanced economies (AEs) before the Global Financial Crisis …
Persistent link: https://www.econbiz.de/10012861733
In much of the world, growth is more stable than it once was. Looking at a sample of twentyfive countries, we find that …
Persistent link: https://www.econbiz.de/10013215364
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 Central Banks independence both in normal times,...
Persistent link: https://www.econbiz.de/10013145247
Modern theory has delivered both the conservative central banker and the principal-agent approaches as rationales for the independence of the central bank. The principal-agent approach directs attention to the importance of both clearly defining the goals of the central bank and its command in...
Persistent link: https://www.econbiz.de/10013229829
We quantify the importance of non-monetary news in central bank communication. Using evidence from four major central banks and a comprehensive classification of events, we decompose news conveyed by central banks into news about monetary policy, economic growth, and separately, shocks to risk...
Persistent link: https://www.econbiz.de/10012911101
We propose a new framework for understanding the effectiveness of central bank announcements when firms have heterogeneous inflation expectations. Expectations are updated through social dynamics and, with heterogeneity, not all firms choose to operate, putting downward pressure on realized...
Persistent link: https://www.econbiz.de/10013053470
determinants and consequences of monetary policy transparency in an integrated econometric framework. We establish that there has … been significant movement in the direction of greater central bank transparency in recent years. Transparent monetary … democracies, with their culture of transparency. Using these political determinants as instruments for transparency, we show that …
Persistent link: https://www.econbiz.de/10013225595
This paper shows that the inability to use monetary policy for macroeconomic stabilization leaves a government more vulnerable to a rollover crisis. We study a sovereign default model with self-fulfilling rollover crises, foreign currency debt, and nominal rigidities. When the government lacks...
Persistent link: https://www.econbiz.de/10012906779
in Germany was always geared toward maintaining price stability with the exception of the two world war periods. Germany …
Persistent link: https://www.econbiz.de/10013224864
An independent central bank can manage its balance sheet and its capital so as to commit itself to a depreciation of its currency and an exchange-rate peg. This way, the central bank can implement the optimal escape from a liquidity trap, which involves a commitment to higher future inflation....
Persistent link: https://www.econbiz.de/10013213439