This essay looks at the foundation and development of the U.S. Federal Reserve and the Bank of England through the perspective of the recent debate over central bank independence in the design of optimal monetary policy. It shows that the creators of the Federal Reserve were acutely aware that...

This essay looks at the foundation and development of the US Federal Reserve and the Bank of England, through the perspective of the recent debate over central bank independence in the design of optimal monetary policy. It shows that the creators of the Federal Reserve were acutely aware that...

The monetary policy is a basic component of the economic policy. It has an important role in fulfilling the main objectives of the economic politics, which is: price stability, insurance of a balanced economic raise, full occupancy of human resources and the external payment balance stability...

I investigate the effects of central bank independence and inflation targeting on macroeconomic performance in 26 advanced economies during the period 1980 to 2011. I find that both improve macroeconomic performance but inflation targeting is the more effective arrangement. When a central bank...

The purpose of this paper is to compare new developments on the monetary policy front, or what is known as inflation targeting, with some of Keynes's ideas as propounded in a pamphlet in 1932. A number of the ingredients of the new monetary policy approach can be found in Keynes, especially that...

The economic crisis arising in 2008 has severely limited the options of economic policy in Hungary. The absence of fiscal expansion, and deficiencies in the coordination of fiscal and monetary policy have had a negative impact on the effectiveness of measures in economic policy to boost economic...

The monetary policy is a basic component of the economic policy. It has an important role in fulfilling the main objectives of the economic politics, which is: price stability, insurance of a balanced economic raise, full occupancy of human resources and the external payment balance stability...

We introduce a fiscally independent central bank with balance sheet concerns in the new Keynesian model. The central bank is subject to a budget constraint and state-contingent transfers from the treasury are not allowed. This change renders the standard optimal monetary policy solution non...

Because the European Central Bank's current goal is to achieve stable prices, some EU countries have adopted direct inflation control as a target of financial policy. Several other countries, however, have adopted other targets, such as money supply targeting, exchange rate targeting, and other...

A number of countries have adopted inflation targeting since the early 1990s in an attempt to reduce inflation to low levels. A number of its ingredients can be found in Keynes, especially that of central bank independence. Is it then the case that we are all Keynesians now? The main theoretical...