Central Bank Credibility And Fiscal Responsibility
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| Author | : Jesse Schreger |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2023 |
| Genre | : |
| ISBN | : |
We consider a New Keynesian model with strategic monetary and fiscal interactions. The fiscal authority maximizes social welfare. Monetary policy is delegated to a central bank with an anti-inflation bias that suffers from a lack of commitment. The impact of central bank hawkishness on debt issuance is non-monotonic because increased hawkishness reduces the benefit from fiscal stimulus while simultaneously increasing real debt capacity. Starting from high levels of hawkishness (dovishness), a marginal increase in the central bank's anti-inflation bias decreases (increases) debt issuance.
| Author | : Michael D. Bordo |
| Publisher | : Cambridge University Press |
| Total Pages | : 719 |
| Release | : 2016-06-09 |
| Genre | : Business & Economics |
| ISBN | : 1107149665 |
This book discusses the role of central banks and draws lessons from examining their evolution over the past two centuries.
| Author | : Torsten Persson |
| Publisher | : MIT Press |
| Total Pages | : 476 |
| Release | : 1994 |
| Genre | : Business & Economics |
| ISBN | : 9780262660884 |
This is the first of two volumes on a theory of macroeconomic policy that analyzes which policies are credible or politically feasible. Instead of looking at policy as an end product, the contributors approach policy as an ongoing process of revised goals, changes in tactics, and political pressures. They consider what kinds of incentives within different institutional settings, drive policy-making and the behaviour of policy-makers. The approach explains why certain monetary and fiscal policies are implemented, and provides insights into situations that occur repeatedly in macroeconomic policy, such as the bias toward government deficits, partisan competition and central bank independence.
| Author | : Tim Willems |
| Publisher | : International Monetary Fund |
| Total Pages | : 28 |
| Release | : 2022-01-28 |
| Genre | : Business & Economics |
| ISBN | : |
This article surveys the literature on sovereign debt sustainability from its origins in the mid-1980s to the present, focusing on four debates. First, the shift from an “accounting based” view of debt sustainability, evaluated using government borrowing rates, to a “model based” view which uses stochastic discount rates. Second, empirical tests focusing on the relationship between primary balances to debt. Third, debt sustainability in the presence of rollover risk. And fourth, whether government borrowing costs below rates of growth (“r
| Author | : Mr.Seok Gil Park |
| Publisher | : International Monetary Fund |
| Total Pages | : 35 |
| Release | : 2012-01-01 |
| Genre | : Business & Economics |
| ISBN | : 1463931190 |
Although central banks have recently taken unconventional policy actions to try to shore up macroeconomic and financial stability, little theory is available to assess the consequences of such measures. This paper offers a theoretical model with which such policies can be analyzed. In particular, the paper shows that in the absence of the fiscal authorities' full backing of the central bank's balance sheet, strange things can happen. For instance, an exit from quantitative easing could be inflationary and central banks cannot successfully unwind inflated balance sheets. Therefore, the fiscal authorities' full backing of the monetary authorities' quasi-fiscal operations is a pre-condition for effective monetary policy.
| Author | : Francesco Lippi |
| Publisher | : Edward Elgar Publishing |
| Total Pages | : 180 |
| Release | : 1999-01-27 |
| Genre | : Business & Economics |
| ISBN | : 9781782542971 |
This book integrates new political and economic elements into the analysis of monetary policy credibility and central bank independence. The author considers imperfect monetary control, rational voters, distributional issues and uncertainty about future policy objectives in his welfare analysis of central banking. The role played by the different institutional elements that contribute to the making of an independent central bank is also assessed. A distinction is made between central bank independence and targets offering new insights into how a more inflation averse monetary policy may actually be achieved. Finally, explanations for the variation of central bank independence and conservatism across different countries are provided. This book will appeal to researchers, academics and policy makers in the fields of monetary policy, financial economics, money and banking and political economy.
| Author | : Mr.Timo Valila |
| Publisher | : International Monetary Fund |
| Total Pages | : 17 |
| Release | : 1999-01-01 |
| Genre | : Business & Economics |
| ISBN | : 1451841744 |
The specific role of central bank independence in determining the overall credibility of monetary policy is addressed in this paper. It is argued that the credibility of delegating monetary policy to an independent central bank is endogenous to the credibility of the inflation target because a “conservative” inflation target may not be compatible with the fiscal policy stance. Also, lack of transparency in designing the institutional set-up is shown to be welfare-reducing.
| Author | : Peter Stella |
| Publisher | : International Monetary Fund |
| Total Pages | : 48 |
| Release | : 2002-08 |
| Genre | : Business & Economics |
| ISBN | : |
A central bank is financially strong if it possesses resources sufficient to attain its fundamental policy objective(s). Once endowed with those resources, relations between government and central bank should be designed so that significant changes in central bank financial strength do not occur unless necessitated by changes in policy objectives. The level of strength required depends on the array of policy objectives (for example, the exchange rate regime) as well as the constraints and risks presented by the operational environment. Attaining credibility is facilitated if the public can easily determine the financial strength of the bank, yet for a variety of reasons this is often difficult. Transparency requires institutional arrangements that ensure the central bank generates profit in most states of the world, is subject to strict ex post independent audit, and transfers regularly all profits, after provisions, to the treasury.
| Author | : Mr.Tamim Bayoumi |
| Publisher | : International Monetary Fund |
| Total Pages | : 49 |
| Release | : 2014-04-04 |
| Genre | : Business & Economics |
| ISBN | : 1475561784 |
The proposed SDN would take stock of the current debate on the shape that monetary policy should take after the crisis. It revisits the pros and cons of expanding the objectives of monetary policy, the merits of turning unconventional policies into conventional ones, how to make monetary policy frameworks more resilient to the risk of being constrained by the zero-lower bound going forward, and the institutional challenges to preserve central bank independence with regards to monetary policy, while allowing adequate government oversight over central banks’ new responsibilities. It will draw policy conclusions where consensus has been reached, and highlight the areas where more work is needed to get more granular policy advice.
| Author | : International Monetary Fund |
| Publisher | : International Monetary Fund |
| Total Pages | : 33 |
| Release | : 1998-03-01 |
| Genre | : Business & Economics |
| ISBN | : 1451844239 |
Recently, monetary authorities have increasingly focused on implementing policies to ensure price stability and strengthen central bank independence. Simultaneously, in the fiscal area, market development has allowed public debt managers to focus more on cost minimization. This “divorce” of monetary and debt management functions in no way lessens the need for effective coordination of monetary and fiscal policy if overall economic performance is to be optimized and maintained in the long term. This paper analyzes these issues based on a review of the relevant literature and of country experiences from an institutional and operational perspective.
