Recent research on central bank governance has focused mainly on their monetary policy task. As the sub-prime loan market turmoil reminded us - central banks play a crucial role in financial markets not only in setting monetary policy, but also in ensuring their soundness and stability. In this...

This paper develops a model of monetary policy in which the central banker can acquire costly information about a supply shock. It is shown that, with this assumption, it may be optimal for society to delegate to a "weight-liberal" central banker, a result which contrasts with that of Rogoff...