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Optimal Commitment in an Open Economy : Credibility vs. Flexibility

Eijffinger, Sylvester C. W.; Schaling, Eric - 2003

to output. This incentive leads to higher than desired inflation. One solution to this credibility problem is to give … independence thus reduces society's credibility problem but this may be at the expense of less flexible countercyclical monetary … policy. The aim of this paper is to find the correct balance between credibility and flexibility, ie the optimal degree of …

Persistent link: https://www.econbiz.de/10014063363

Credibility of Optimal Monetary Delegation

Jensen, Henrik - 1998

When optimal monetary policy is subject to a credibility problem, it is often argued that the government should appoint … credibility problems given that delegation is discretionary and without costs. "Reappointment costs" of delegation are shown to … improve suboptimal outcomes, but credibility of optimal monetary policy turns out to be worsened. At best, delegation …

Persistent link: https://www.econbiz.de/10014067421

Does central bank transparency and communication affect financial and macroeconomic forecasts?

Lustenberger, Thomas; Rossi, Enzo - 2018

In a large sample of countries across different geographic regions and over a long period of time, we find limited country- and variable-specific effects of central bank transparency on forecast accuracy and their dispersion among a large set of professional forecasts of financial and...

Persistent link: https://www.econbiz.de/10011790688

What bird is that? : central banking and monetary policy in the last forty years

Masciandaro, Donato - 2020

The aim of this paper is to review the historical development of monetary policy theory since the 1980s using as focal …

Persistent link: https://www.econbiz.de/10012210748

Do financial markets allow the independence of central banks?

Miró, Damià Rey; Piffaut, Pedro; Zurdo, Ricardo Palomo - In: Journal of central banking theory and practice 13 (2024) 1, pp. 5-26

The research work presented below addresses the possible concern of central bank independence through the development and application of econometric models. The complexity of the modelling has allowed a step further in corroborating that financial independence is not only linked to the...

Persistent link: https://www.econbiz.de/10014496228

The macroeconomic effects of different CBDC regimes in an economy with a heterogeneous household sector

Magin, Jana Anjali; Neyer, Ulrike; Stempel, Daniel - 2023

Many central banks discuss the introduction of a Central Bank Digital Currency (CBDC). Empirical evidence suggests that households may differ in their willingness to hold CBDC. Against this background, this paper investigates the macroeconomic effects of different CBDC regimes in a New Keynesian...

Persistent link: https://www.econbiz.de/10014229087

Central bank capital as an instrument of monetary policy

Hampl, Mojmír; Havránek, Tomáš - 2018

We examine the use of central bank capital as an unconventional monetary policy tool. In this setting, a central bank employs digital currency to transfer digital cash to each household, thus supporting consumption directly when needed. The asset side of the central bank's balance sheet remains...

Persistent link: https://www.econbiz.de/10011833686

Central bank independence : myth and misunderstanding

Wray, L. Randall - 2014

It is commonplace to speak of central bank "independence" as if it were both a reality and a necessity. While the Federal Reserve is subject to the "dual mandate", it has substantial discretion in its interpretation of the vague call for high employment and low inflation. Most important, the...

Persistent link: https://www.econbiz.de/10010252188

What kind of central bank competence?

Frankel, Alex; Kartik, Navin - In: Theoretical economics : TE ; an open access journal in … 13 (2018) 2, pp. 697-727

effect of monetary policy? We consider a version of the Barro–Gordon credibility problem in which monetary policy signals an …

Persistent link: https://www.econbiz.de/10011856711

Monetary-Labor Interactions, International Monetary Regimes, and Central Bank Conservatism

Cuciniello, Vincenzo - 2011

A two-country general equilibrium model with large wage setters and conservative monetary authorities is employed to investigate the welfare implications of three international monetary regimes: i) non-cooperative, ii) cooperative, and iii) monetary union. The analysis shows that the unions'...

Persistent link: https://www.econbiz.de/10013134305