Central bank independence and conservatism under uncertainty: Substitutes or complements?

This paper revisits the trade-off between central bank independence and conservatism using a New Keynesian model with uncertainty about the central banker's output gap target. It is shown that when this uncertainty is high, the trade-off no longer holds. In this case, the optimal combination between independence and conservatism is characterised by complementarity.

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Year of publication:	2010
Authors:	Hefeker, Carsten ; Zimmer, Blandine
Publisher:	Frankfurt a. M. : Verein für Socialpolitik
Subject:	Central bank independence \| Conservatism \| Transparency of monetary policy

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Series:	Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Monetary Policy Rules and Institutions ; B16-V3
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Conference Paper
Language:	English
Other identifiers:	654802742 [GVK] hdl:10419/37158 [Handle]
Classification:	E52 - Monetary Policy (Targets, Instruments, and Effects) ; E58 - Central Banks and Their Policies ; F33 - International Monetary Arrangements and Institutions
Source:	EconStor

Persistent link: https://www.econbiz.de/10010270210