The aim of this paper is to review the historical development of monetary policy theory since the 1980s using as focal point the nexus among central bank governance, central banker preferences and monetary policy effectiveness. Assuming a positive perspective the review highlights three...

Despite the central bank's crucial position in the economy, as the issuer of the currency and the body responsible for monetary policy, its preferences regarding currency internationalization and its roles in that process have rarely been analyzed in the literature. This study attempts to fill...

This paper examines the interactions between monetary regimes and public debt management. The analysis shows that delegation of monetary policy to an independent central bank is more effective in containing inflationary expectations than the use of foreign currency or price-indexed debt. If...

Inflation in advanced economies is low by historical standards but there is no threat of deflation. Slower economic growth is caused by supply-side constraints rather than low inflation. Below-the-target inflation does not damage the reputation of central banks. Thus, central banks should not...

Under ordinary circumstances, the fiscal implications of central bank policies tend to be seen as relatively minor and escape close scrutiny. The global financial crisis of 2008, however, demanded an extraordinary response by central banks which brought to light the immense power of central bank...

Given low interest rates in the large industrial countries and buoyant capital inflows into the emerging markets East Asian central banks have accumulated large stocks of foreign reserves. As the resulting easing of monetary conditions has become a threat to domestic price and financial...

As the Federal Reserve continues to normalize its monetary policy, this paper studies the impact of U.S. interest rates on rates in other countries. We find a modest but nontrivial pass-through from U.S. to domestic short-term interest rates on average. We show that, to a large extent, this...

Given low interest rates in the large industrial countries and buoyant capital inflows into the emerging markets East Asian central banks have accumulated large stocks of foreign reserves. As the resulting easing of monetary conditions has become a threat to domestic price and financial...

The presently tenuous situation in Turkey will worsen if the government does not take appropriate policy action. In view of foreign investors’ loss of confidence, the cost of external financing is likely to rise while consumption and investment will fall, and the Turkish lira would depreciate...

In economically volatile conditions in which it is more difficult for the public to distinguish inflation deliberately generated by government from inflation created by unanticipated economic shocks, the anti-inflationary effect of central bank independence will be unchanged but the...