The choice of a conservative central banker in a multisector economy
Article Abstract:
A conservative central banker establishes policies in a discretionary manner but places more emphasis on lowering inflation than the general public does. This type of banker produces a lower equilibrium inflation rate but greater fluctuations in output. The advantages of lower inflation still are greater than the disadvantages of greater stability. A multisector macroeconomic model shows that the selection of a conservative central banker causes conflicts over the amount of output instability and inflation reduction that should occur.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1992
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Central-bank independence, economic behavior, and optimal term lengths
Article Abstract:
Central-bank independence is characterized in terms of partisanship, conservativeness and term length, with focus on the effects of alternative policy structures for real economic activity. This allows for better insights on the impact of political independence on macroeconomic behavior. Optimal term length is found to be increased by a rise in the short-run variability of voter choice. The correlation between measures of central-bank independence and output variability is confirmed to be zero.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1996
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Central-bank independence, economic behavior, and optimal term lengths: comment
Article Abstract:
The effects of the independence of central banks on the economy was analyzed using the Waller-Walsh model. Results showed that independence was due mainly to the partisan political influence, conservativeness, and length of central banker's term in office. The length of term in office and the degree of conservativeness mostly rely on rewards received by the bankers and targeting schemes in inflation rate. However, the influence of partisanship weakens the independence of the central bank.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1999
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