This paper revisits the trade-off between central bank independence and conservatism using a New Keynesian model with … holds. In this case, the optimal combination between independence and conservatism is characterised by complementarity. …

This paper revisits the trade-of between central bank independence and conservatism using a New Keynesian model with … holds. In this case, the optimal combination between independence and conservatism is characterised by complementarity. …

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 …

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 …

combinations of central bank independence and conservatism. Most of the existing empirical studies concentrate on measuring legal … or factual central bank independence thereby neglecting the degree of conservatism of the monetary authorities. In this … paper we show how a joint empirical measure of central bank independence and conservatism can be derived from factual …