According to the game-theoretic model of monetary policy, inflation is the consequence of time-inconsistent behavior of the monetary authority. The inflation bias can be eased by handing over the responsibility for monetary policy to an independent central bank and appointing a...

Based on an extended version of a time-inconsistency model of monetary policy we show that the degree of effective monetary policy conservatism can be uncovered by studying to what extent central banks react to real disturbances. By estimating central bank reaction functions in moving and...

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...

We show that, in a two-stage model of monetary policy with stochastic policy targets and asymmetric information, the transparency regime chosen by the central bank does never coincide with the regime preferred by society. Independent of society's endogenous choice of delegation, the central bank...

Die Hochwasserkatastrophe vor 20 Jahren hat massive Schäden in zahlreichen Gemeinden Sachsens verursacht. Eine der Lehren aus dem damaligen Schock war, dass mehr Resilienz nötig ist. Unsere Untersuchung der Bevölkerungsdaten zeigt jedoch, dass gerade diejenigen Gemeinden, die von der Flut...