Journal ArticleDOI
Measuring the Independence of Central Banks and Its Effect on Policy Outcomes
TLDR
In this paper, the authors developed four measures of central bank independence and explored their relation with inflation outcomes, including the rate of turnover of the central bank governors, the aggregation of the legal index, and the number of changes in the chief executive of a central bank.Abstract:
Making the central bank an agency with the mandate and reputation for maintaining price stability is a means by which a government can choose the strength of its commitment to price stability. This article develops four measures of central bank independence and explores their relation with inflation outcomes. An aggregate legal index is developed for four decades in 72 countries. Three indicators of actual independence are developed: the rate of turnover of central bank governors, an index based on a questionnaire answered by specialists in 23 countries, and an aggregation of the legal index and the rate of turnover. Legal independence is inversely related to inflation in industrial, but not in developing, countries. In developing countries the actual frequency of change of the chief executive officer of the bank is a better proxy for central bank independence. An inflation-based index of overall central bank independence contributes significantly to explaining cross-country variations in the rate of inflation.read more
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Veto Players: How Political Institutions Work
TL;DR: In this paper, Veto players analysis of European Union Institutions is presented, focusing on the role of individual veto players and collective players in the analysis of the institutions of the European Union.
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Monetary Theory and Policy
TL;DR: In this article, empirical evidence on money and output is presented, including the Tobin effect and the MIU approximation problems, and a general equilibrium framework for monetary analysis is presented.
Book
Central Banking in Theory and Practice
TL;DR: Based on the 1996 Lionel Robbins lectures, the author as mentioned in this paper deals with a variety of issues in monetary policy including the goals of monetary policy, the choice of monetary instrument, the rule-versus-discretion debate, suggested remedies for the alleged problem of inflationary bias, central bank credability, arguments for and against central bank independence and the interplay between the central bank and financial markets.
Journal ArticleDOI
Political Uncertainty and Corporate Investment Cycles
Brandon Julio,Youngsuk Yook +1 more
TL;DR: In this paper, the authors investigate several potential explanations and find evidence supporting the hypothesis that political uncertainty leads firms to reduce investment expenditures until the electoral uncertainty is resolved, which is an important channel through which the political process affects real economic outcomes.
Posted Content
Inflation Crises and Long-Run Growth
William Easterly,Michael Bruno +1 more
TL;DR: Bruno and Easterly as mentioned in this paper found no evidence of a consistent relationship between growth and inflation, at any frequency, and showed that growth does tend to fall sharply during discrete crises of high inflation and to recover surprisingly strongly after inflation falls.
References
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Journal ArticleDOI
The Optimal Degree of Commitment to an Intermediate Monetary Target
TL;DR: In this article, it is shown that the ideal central bank should place a large, but finite, weight on inflation, and a new framework for choosing among alternative intermediate monetary targets is proposed.
Book
Central Bank Strategy, Credibility, and Independence: Theory and Evidence
TL;DR: In this paper, the authors discuss monetary policy with private information under perfect information and asymmetric information and changing objectives under discretion, and provide an overview of the employment and revenue motivations for monetary expansion.
Journal ArticleDOI
Political and monetary institutions and public financial policies in the industrial countries
TL;DR: In this article, Grilli, Masciandaro and Tabellini investigated the role of institutions in providing constraints and incentives which shape the actions of policymakers and found that there is no link between monetary and fiscal discipline.
Book
The evolution of central banks
TL;DR: Goodhart as mentioned in this paper surveys the case for free banking, examines the key role of the clearing house in the evolution of the central bank, and investigates bank expansion and fluctuation in the context of a clearing house mechanism.