Central banks do not operate in a vacuum. In this paper we analyse the fac-tors leading to external pressure or public support for European monetary policy. Moreover, based upon the findings for the Deutsche Bundesbank, some additional les-sons are drawn for the ECB. External pressure on the ECB...

We conduct an experiment to investigate (i) whether rotation in voting improves a committee's performance, and (ii) the extent to which rotation critically influences collective and individual welfare. The experiment is based on the idea that voters have to trade-off between individual and...

Since 2002, spreads on emerging market sovereign debt have fallen to historical lows. Given the close links between sovereign spreads, capital flows to emerging markets, and economic growth, understanding the factors driving sovereign spreads is very important. This paper uses factor analysis to...

We review key characteristics of the hedge fund industry, and identify conditions under which this sector can pose a threat to financial stability. Direct regulation of hedge funds that increases transparency does not appear feasible, may create a moral-hazard problem, and may reduce market...

Philipp Maier offers a unique examination of the extent to which governments and various interest groups have exerted pressure on central banks. The book looks in particular at the Deutsche Bundesbank – which acted as the blueprint for the European Central Bank (ECB) – and utilises an...

We analyse the optimal composition of a committee comprising members that have private information and represent constituencies of different economic sizes. ‘Proportional representation' - i.e. each constituency represented proportionally to its economic weight - seems intuitively...

Little attention has been paid in most economic studies on political businesscycles to separate the effects of fiscal and monetary policy. We attempt to as-sess the effect of monetary policy in a panel model for 16 OECD countries.To answer the question whether central banks actively create...

We attempt to assess the effect of monetary policy in a panel model for 16 OECD countries. To answer the question whether central banks actively create political business cycles we focus on the short-term interest rate as a proxy for the use of monetary instruments. Our results indicate that...

This paper analyses the role of bank lending in the monetary transmission process in Germany. We follow a sectoral approach by distinguishing corporate lending and household lending. We find that banks respond to a monetary contraction by adjusting their securities holdings, rather than reducing...