This working paper offers some considerations on the monetary policy framework of the European Central Bank. The trade-offs arising from adopting a point target configuration over a range target one are assessed in terms of their flexibility vs. inflation anchoring properties. This layout is...

One of the focuses of recent literature has been the macroeconomic effects of macroprudential policy instruments. The innovation of this paper is that it studies the effects of transparent macro-prudential policies on price stability. The results presented herein provide the first empirical...

The European Central Bank (ECB) recently proclaimed a more active role for itself in the fight against climate change. Did the European Parliament (EP) play a part in this regard, and if so what was it? To answer this question, this paper builds on a multi-method text analysis of original...

The ECB is independent, but it is also accountable to the European parliament (EP). Yet, how the EP has held the ECB accountable has largely been overlooked. This paper starts addressing this gap by providing descriptive statistics of three accountability modalities. The paper highlights three...

The ECB's price stability mandate has been defined by the Treaty. But the Treaty has not spelled out what price stability precisely means. To make the mandate operational, the Governing Council has provided a quantitative definition in 1998 and a clarification in 2003. The landscape has changed...

Aim: In this article, the state of the discourse concerning the final goal of the modern central bank is presented, in particular the aim of price stability, understood as low and stable inflation. Design/Research methods: The article was prepared on the basis of scientific publications in the...

By the end of 2020, the European Central Bank (ECB) will present the results of its monetary policy strategy review. What changes are to be expected and what changes are needed? This report covers two areas of the strategy review. First, alternatives to the current definition of price stability...

This Policy White Paper assesses several main elements of ECB's upcoming review of its monetary policy strategy, announced in January 2020. Four aspects of the review are discussed in detail: i) ECB's definition of price stability and the arguments for and against inflation targeting; ii) the...

This Occasional Paper analyses how significant expansions in central banks' mandates, roles and instruments can result in challenges to the independence of monetary policy. The paper reviews, in particular, some of the key challenges to central bank independence brought about by the global...

In the communication of the European Central Bank (ECB), the statement that "we act within our mandate" is often referred to. Also among practitioners of the Eurosystem the term "mandate" has become popular. In his Working Paper, Helmut Siekmann analyzes the legal foundation of the tasks and...

This paper compares the main intersectoral and national agricultural institutions in Russia and Switzerland during the period 2004-2019 and uses data from the Food and Agriculture Organization (FAO), an ordinary least squares model and fixed-effects models to assess the contributions of...

This working paper offers some considerations on the monetary policy framework of the European Central Bank. The trade-offs arising from adopting a point target configuration over a range target one are assessed in terms of their flexibility vs. inflation anchoring properties. This layout is...

The greening monetary policy incorporates essential enduring policy decisions towards low carbon economy without deviating from the main functions of monetary policy. The challenges are safeguarding low carbon assets while the investors prefer carbon-intensive investments. European Central Bank...

Food price volatility broadly impacts the country's food security. Rice price stabilization in Indonesia is carried out by BULOG, the food state-owned enterprise (SOE) that the WTO has identified as Indonesia's state trading enterprise (STE). This study was conducted to evaluate the price...

The European Central Bank (ECB) recently proclaimed a more active role for itself in the fight against climate change. Did the European Parliament (EP) play a part in this regard, and if so what was it? To answer this question, this paper builds on a multi-method text analysis of original...

The ECB is independent, but it is also accountable to the European parliament (EP). Yet, how the EP has held the ECB accountable has largely been overlooked. This paper starts addressing this gap by providing descriptive statistics of three accountability modalities. The paper highlights three...

How should independent central banks react if pressured by fiscal policymakers? We study an environment with strategic monetary-fiscal interactions where the central bank has a limited degree of commitment to follow policies over time and the fiscal authority has none. We contrast the...

The paper discusses what we have learned from last year's currency crises in ERM and the Nordic countries about fixed exchange rates as a means to achieve price stability. After discussing the explanations for the crises, the paper concludes that fixed exchange rates are not a shortcut to price...

We lay out a tractable model for fiscal and monetary policy analysis in a currency union, and analyze its implications for the optimal design of such policies. Monetary policy is conducted by a common central bank, which sets the interest rate for the union as a whole. Fiscal policy is...

We study whether a central bank should deviate from its objective of price stability to promote financial stability. We tackle this question within a textbook New Keynesian model augmented with capital accumulation and microfounded endogenous financial crises. We compare several interest rate...

Strong evidence now exists both in macro and micro data that price/wage durations are depent on the state of the economy and especially inflation. We embed this dependence in a macro model of the US that otherwise does well in matching the economy s behaviour in the last three decades; it now...

The popularity of inflation targeting has risen in the last decade and the number of countries that adopted inflation targeting as their monetary policy framework surpassed 40 by the end of 2016. This study analyzes whether inflation targeting around the world has been successful in terms of...

Um der Coronakrise mit ihren enormen Auswirkungen auf Gesellschaft und Wirtschaft zu begegnen, sind qualitativ hochwertige Statistiken unverzichtbar. Dabei kommt der Inflationsmessung - verstärkt durch die Überprüfung der geldpolitischen Strategie der Europäischen Zentralbank - besondere...

This paper investigates the impact of natural disasters on price stability in the euro area. We estimate panel and country-specific structural vector autoregression (VAR) models by combining estimated damages of disaster events with monthly data for the Harmonised Index of Consumer Prices (HICP)...

Following the twin crises of sovereign debt and COVID-19, the ECB risks being stuck in a situation of fiscal dominance, in which monetary policy is subordinated to the needs of finance ministers. A strong post-COVID-19 recovery may increase inflationary pressures, requiring a shift towards a...

When aiming at price stability, central banks closely monitor exchange rates. Their level is known to influence prices, since many product components are sourced internationally. An RWI study suggests that central bankers should also take the level of uncertainty about future exchange rates into...

We contribute to the debate surrounding central banks and climate change by investigating how extreme temperatures affect medium-term inflation, the primary objective of monetary policy. Using panel local projections for 48 advanced and emerging market economies (EMEs), we study the impact of...

I study a class of macroeconomic models in which all firms can costlessly choose any price at each date from an interval (indexed to last period's price level) that includes a positive lower bound. I prove three results that are valid for any such half‐closed interval (regardless of how near...

This paper offers an overview of the mandate of the European Central Bank (ECB), as defined by its objectives, the instruments available to achieve them and the constitutional framework that the ECB shall observe in pursuing them. The objectives include the primary objective of maintaining price...

The existence of nominal rigidities and inflation differentials between countries offers two of the main rationales for an inflation buffer in a monetary union where monetary policy is oriented towards an area-wide inflation objective. Evidence accumulated since 2003 suggests that nominal...

Viele Entscheidungen des täglichen Lebens erfordern ökonomische Kenntnisse. Es gibt somit gute Gründe, das Wissen über Wirtschafts- und Finanzthemen zu stärken. In Deutschland gibt es bislang für ökonomische Bildung keine federführende Institution. Vielmehr engagieren sich neben dem...

The ECB's price stability mandate has been defined by the Treaty. But the Treaty has not spelled out what price stability precisely means. To make the mandate operational, the Governing Council has provided a quantitative definition in 1998 and a clarification in 2003. The landscape has changed...

This paper offers an overview of the mandate of the European Central Bank (ECB), as defined by its objectives, the instruments available to achieve them and the constitutional framework that the ECB shall observe in pursuing them. The objectives include the primary objective of maintaining price...

Um der Coronakrise mit ihren enormen Auswirkungen auf Gesellschaft und Wirtschaft zu begegnen, sind qualitativ hochwertige Statistiken unverzichtbar. Dabei kommt der Inflationsmessung – verstärkt durch die Überprüfung der geldpolitischen Strategie der Europäischen Zentralbank – besondere...

This paper investigates the impact historically of aggregate price shocks on financial stability in the United Kingdom. We construct an annual index of U.K. financial conditions for 1790-1999 and use a dynamic probit model to estimate the effect of aggregate price shocks on the index. We find...

This work analyses the role of asymmetry in beliefs for price dynamics in a cobweb model with heterogeneous expectations and evolutionary selection of predictors. While heterogeneous but symmetric beliefs result in the rational expectations equilibrium price, the effect of asymmetry depends on...