Institutions and Monetary Policy: Credibility, Flexibility and Central Bank Independence

by Eric Schaling

Overview

Central bank independence is a key issue for political and monetary authorities in many countries. In Institutions and Monetary Policy, Eric Schaling looks at the impact of different central banks on price stability and macroeconomic performance, and their optimal degree of legislative independence.

After introducing and surveying the rules versus discretion debate in monetary policy, Eric Schaling then investigates the relationship between domestic monetary institutions and macroeconomic performance. The author compares central bank independence in twelve industrial countries - Australia, Belgium, Canada, France, Germany, Italy, Japan, the Netherlands, the United Kingdom, the United States, Sweden and Switzerland - and prepares an index of his results. The relationship between central bank independence, inflation and output growth is extensively discussed and a series of propositions tested for the same set of countries over the period from 1972 to 1991. Normative issues are investigated in the later part of the book including the optimal degree of central bank independence in relation to, first, the inflation rate and, second, wage formation in a totally unionized economy.

Institutions and Monetary Policy will be welcomed by scholars and policymakers concerned with the increasingly important role of institutions in monetary policy and the relation between degrees of central bank independence and political and economic outcomes.

Product Details

ISBN-13:	9781858981628
Publisher:	Edward Elgar Publishing
Publication date:	03/01/1995
Pages:	272
Product dimensions:	6.12(w) x 9.25(h) x (d)

About the Author

Eric Schaling, Wits Business School, University of the Witwatersrand, South Africa

Table of Contents

Contents: Acknowledgements Part I: Introduction Part II: A History of the Rules versus Discretion Debate A: Institutions and Macroeconomic Performance Part III: Central Bank Independence in Twelve Industrial Countries Part IV: Central Bank Independence: Theory and Evidence Part V: Central Bank Independence, Monetary Accommodation and Inflation Persistence B: Optimal Commitment in Monetary Policy Part X: Inflation, Growth and the Optimal Degree of Central Bank Independence Part XI: Wage Formation, Monetary Targeting and the Optimal Degree of Central Bank Independence Part XII: Summary and Concluding Remarks References Summary in Dutch

Editorial Reviews

'. . . a rigorous and scholarly analysis of the nature of central bank independence (CBI). Luckily for the non-mathematical reader, there are clear explanations, laying out the argument that is developed in fully worked mathematical models: but much is strictly for the technically competent.'

Central Banking