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

Hefeker, Carsten; Zimmer, Blandine - 2011

The paper examines the optimal combination of central bank independence and conservatism in the presence of uncertain … bank's degree of inde-pendence and conservatism so as to minimise society's loss function. We find that the optimal … combination between independence and conservatism is not necessarily characterised by substitutability. When uncertainty about the …

Persistent link: https://www.econbiz.de/10010274857

Inflation Targets Versus International Monetary Integration - A Canadian Perspective

Laidler, David - 2002

The debate about Canadian-U.S. monetary integration is surveyed. The choice is among overall monetary orders,rather than exchange rate regimes and questions of policy credibility and political accountability are crucial. Canada's recent economic performance under inflation targets, and arguments...

Persistent link: https://www.econbiz.de/10010315333

How should large and small countries be represented in a currency union?

Berger, Helge; Mueller, Till - 2004

The likely extension of the euro area has triggered a debate on the organization of the ECB, in particular on the apparent mismatch between relative economic size and voting rights in the Council. We present a simple model of optimal representation in a federal central bank addressing this...

Persistent link: https://www.econbiz.de/10010261091

EMU enlargement, policy uncertainty and economic reforms

Hefeker, Carsten - 2006

The paper analyzes the relation between monetary uncertainty and government incentives to implement economic reforms that reduce structural distortions and make economies more flexible. It is shown that uncertainty about the central bank's reaction function leads to more reforms. I relate this...

Persistent link: https://www.econbiz.de/10010263953

Optimal Conservatism and Collective Monetary Policymaking under Uncertainty

Hefeker, Carsten; Zimmer, Blandine - 2014

We study how the optimal degree of conservatism relates to decision-making procedures in a Monetary Policy Committee … (MPC). In our framework, central bank conservatism is required to attenuate the volatility of monetary decisions generated … by the presence of uncertainty about the committee members' output objective. We show how this need for conservatism …

Persistent link: https://www.econbiz.de/10010398575

International Inflation Spillovers Through Input Linkages

Auer, Raphael A.; Levchenko, Andrei A.; Sauré, Philip - 2017

We document that observed international input-output linkages contribute substantially to synchronizing producer price inflation (PPI) across countries. Using a multi-country, industry-level dataset that combines information on PPI and exchange rates with international and domestic input-output...

Persistent link: https://www.econbiz.de/10011657116

The effect of monetary unification on public debt and its real return

Beetsma, Roel; Vermeylen, Koen - 2005

We explore the implications of monetary unification for real interest rates and (relative) public debt levels. The adoption of a common monetary policy renders the risk-return characteristics of the participating countries more similar, so that the substitutability of their public debt increases...

Persistent link: https://www.econbiz.de/10010261138

Connected Lending of Last Resort

Mitchener, Kris James; Monnet, Eric - 2023

Because of secrecy, little is known about the political economy of central bank lending. Utilizing a novel, hand-collected historical daily dataset on loans to commercial banks, we analyze how personal connections matter for lending of last resort, highlighting the importance of governance for...

Persistent link: https://www.econbiz.de/10014290136

The role of political institutions for the effectiveness of central bank independence

Hielscher, Kai; Markwardt, Gunther - 2011

This paper empirically studies the impact of the quality of political institutions on the link between central bank independence and inflation. Making use of data on the evolution of central bank independence over time and controlling for possible nonlinearities, we employ interaction models to...

Persistent link: https://www.econbiz.de/10010274749

Stable Money and Central Bank Independence: Implementing Monetary Institutions in Postwar Germany

Hefeker, Carsten - 2019

Germany prides itself in having one of the most successful central banks and currencies with respect to independence and stability. I show that not only were both imposed on the country after 1945 but that there was also initial resistance to both among German experts and officials. This is a...

Persistent link: https://www.econbiz.de/10012141093