Reconsidering central bank independence

European Journal of Political Economy

Volumn 18, Issue 4, 2002, Pages 653-674

  Hayo, Bernd ^a,b,d   Hefeker, Carsten ^a,c  

^a GEORGETOWN UNIVERSITY   (United States)

^b UNIVERSITY OF BONN   (Germany)

^c Hamburgisches Welt Wirtschafts Archiv   (Germany)

^d UNIVERSITY OF DUISBURG ESSEN   (Germany)

Author keywords

Central bank independence; Monetary policy

Indexed keywords

EID: 0036837748     PISSN: 01762680     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0176-2680(02)00113-1     Document Type: Article

References (106)

1. Albanesi, S., Chari, V.V., Christiano, L.J., 2001. How severe is the time inconsistency problem in monetary policy? NBER working paper 8139.
2. Alesina, A., 1988. Macroeconomics and politics. NBER Macroeconomic Annual. MIT Press, Cambridge, MA, pp. 13-52.
3. al-Nowaihi, A., Levine, P., 1994. Can reputation resolve the monetary policy credibility problem? Journal of Monetary Economics 33, 355-380.
4. Bagheri, F.M., Habibi, N., 1998. Political institutions and central bank independence: a cross-country analysis. Public Choice 96, 187-204.
5. Barro, R.J., Gordon, D., 1983. Rules, discretion, and reputation in a positive model of monetary policy. Journal of Monetary Economics 12, 101-121.
6. Berger, H., 1997. Konjunkturpolitik im Wirtschaftswunder. Mohr-Siebeck, Tübingen.
7. Berger, H., de Haan, J., 1999. A state within a state? An event study on the Bundesbank. Scottish Journal of Political Economy 46, 17-39.
8. Berger, H., Woitek, U., 1997. How opportunistic are partisan German central bankers: evidence on the Vaubel hypothesis. European Journal of Political Economy 13, 807-821.
9. Berger, H., Woitek, U., 2001. The German political business cycle: money demand rather than monetary policy. European Journal of Political Economy 17, 609-631.
10. Berger, H., de Haan, J., Eijffinger, S.C.W., 2001a. Central bank independence: an update of theory and evidence. Journal of Economic Surveys 15, 3-40.
11. Berger, H., Hefeker, C., Schöb, R., 2001b. Optimal central bank conservativeness and monopoly trade unions. CESifo-working paper 427.
12. Bernanke, B., Laubach, T., Mishkin, F., Posen, A., 1999. Inflation Targeting. Princeton Univ. Press, Princeton.
13. Blinder, A., 1998. Central Banking in Theory and Practice. MIT Press, Cambridge, MA.
14. Blinder, A., 1999. Central bank credibility: why do we care? How do we build it? American Economic Review 90, 1421-1431.
15. Blinder, A., Goodhart, C., Hildebrand, P., Lipton, D., Wyplosz, C., 2001. How do central banks talk? Geneva Reports on the World Economy, vol. 3, International Center for Monetary and Banking Studies, Geneva.
16. Bofinger, P., Hefeker, C., Pfleger, K., 1998. Stabilitätskultur in Europa. Deutscher Sparkassen-Verlag, Stuttgart.
17. Boyd, J.H., Levine, R., Smith, B.S., 2001. The impact of inflation on financial sector performance. Journal of Monetary Economics 47, 221-248.
18. Briault, C.B., Haldane, A.G., King, M.A., 1996. Independence and accountability. Bank of England working paper 49.
19. Buiter, W., 1999. Alice in Euroland. Journal of Common Market Studies 37, 181-209.
20. Calmfors, L., Driffill, J., 1988. Bargaining structure, corporatism and macroeconomic performance. Economic Policy 6, 13-62.
21. Campillo, M., Miron, J.A., 1997. Why does inflation differ across countries? In: Romer, C.D., Romer, D.H. (Eds.), Reducing Inflation: Motivation and Strategy. University of Chicago Press, Chicago, pp. 335-357.
22. Cobham, D., Cosci, S., Mattesini, F., Serre, J.-M., 1999. The nature and relevance of central bank independence: an analysis of three European countries. University of St. Andrews, Department of Economics.
23. Collins, S.M., Giavazzi, F., 1993. Attitudes towards inflation and the viability of fixed exchange rates: evidence from the EMS. In: Bordo, M., Eichengreen, B. (Eds.), A Retrospective on the Bretton Woods System: Lessons for International Monetary Reform. University of Chicago Press, Chicago, pp. 547-577.
24. Coricelli, F., Cukierman, A., Dalmazzo, A., 2000. Monetary institutions, monopolistic competition, unionized labour markets and economic performance. CEPR discussion paper 2407.
25. Cubitt, R.P., 1992. Monetary policy games and private sector precommitment. Oxford Economic Papers 44, 513-530.
26. Cukierman, A., 1992. Central Bank Strategy, Credibility, and Independence. MIT Press, Cambridge, MA.
27. Cukierman, A., 1994. Commitment through delegation, political influence and central bank independence. In: De Beaufort Wijnholds, J.O., Eijffinger, S.C.W., Hoogduin, L.H. (Eds.), A Framework for Monetary Stability. Kluwer Academic Publishing, Dordrecht, pp. 55-74.
28. Cukierman, A., Lippi, F., 1999. Central bank independence, centralization of wage bargaining, inflation and unemployment: theory and some evidence. European Economic Review 43, 1395-1434.
29. Cukierman, A., Webb, S.B., 1995. Political influence on the central bank: international evidence. World Bank Review 9, 397-423.
30. Cukierman, A., Miller, G., Neyapti, B., 2000. Central bank reform, liberalization and inflation in transition economies: an international perspective. Foerder Institute for Economic Research working paper 19, Tel Aviv University.
31. De Haan, J., Eijffinger, S.C.W., 2000. The democratic accountability of the European Central Bank: a comment on two fairy-tales. Journal of Common Market Studies 38, 393-407.
32. De Haan, J., van't Hag, G.J., 1995. Variation in central bank independence across countries: some provisional empirical evidence. Public Choice 85, 335-351.
33. De Jong, E., 2002. Why are price stability and statutory independence of central banks negatively correlated? The role of culture. European Journal of Political Economy, in press.
34. Di Tella, R., MacCulloch, R., Oswald, A., 2001. Preferences over inflation and unemployment: evidence from surveys of happiness. American Economic Review 91, 335-341.
35. Drazen, A., 2001. The political business cycle after 25 years. NBER Macroeconomics Annual 2000.
36. Eichengreen, B., 1994. International Monetary Arrangements for the 21st Century. Brookings Institution, Washington.
37. Eichengreen, B., Wyplosz, C., 1993. The unstable EMS. Brookings Papers on Economic Activity 1, 51-124.
38. Eijffinger, S.C.W., de Haan, J., 1996. The political economy of central-bank independence. Princeton Special Papers in International Economics 19.
39. Eijffinger, S.C.W., Hoeberichts, M., 1998. The trade off between central bank independence and conservativeness. Oxford Economic Papers 50, 397-411.
40. Eijffinger, S., van Keulen, M., 1995. Central bank independence in another eleven countries. Banca Nazionale del Lavoro Quarterly Review 192, 39-83.
41. Elster, J., 2000. Ulysses Unbound: Studies in Rationality, Precommitment and Constraints. Cambridge Univ. Press, Cambridge.
42. Emminger, O., 1986. DM, Dollar, Währungskrisen. Deutsche Verlags-Anstalt, Stuttgart.
43. Farvaque, E., 2002. Political systems and central bank independence. Economies et Sociét-aces, in press.
44. Fischer, S., Huizinga, J., 1982. Inflation, unemployment and public opinion polls. Journal of Money, Credit and Banking 14, 39-51.
45. Forder, J., 1996. On the measurement and assessment of "institutional" remedies. Oxford Economic Papers 48, 39-51.
46. Forder, J., 1998a. Central bank independence: conceptual clarifications and interim assessment. Oxford Economic Papers 51, 307-334.
47. Forder, J., 1998b. The case for an independent central bank: a reassessment of evidence and sources. European Journal of Political Economy 14, 53-71.
48. Forder, J., 2001. The theory of credibility and the reputation-bias of policy. Review of Political Economy 13, 5-25.
49. Giavazzi, F., Giovannini, A., 1989. Limiting Exchange Rate Flexibility. MIT Press, Cambridge, MA.
50. Giavazzi, F., Pagano, M., 1988. The advantage of tying one's hands: EMS discipline and central bank credibility. European Economic Review 32, 1055-1082.
51. Giordani, P., Spagnolo, G., 2001. Constitutions and central-bank independence: an objection to "McCallum's second fallacy". Stockholm School of Economics, mimeo.
52. Grilli, V., Masciandaro, D., Tabellini, G., 1991. Institutions and policies. Economic Policy 6, 341-392.
53. Gros, D., Hefeker, C., 2002. One size must fit all: national divergences in a monetary union. German Economic Review, in press.
54. Grüner, H.P., 1996. Monetary policy, reputation and hysteresis. Zeitschrift für Wirtschafts- und Sozialwissenschaften 116, 15-29.
55. Grüner, H.P., Hefeker, C., 1995. Domestic pressures and the exchange rate regime: why economically bad decision are politically popular. Banca Nazionale del Lavoro Quarterly Review 194, 331-350.
56. Guzzo, V., Velasco, A., 1999. The case for a populist central banker. European Economic Review 43, 1317-1344.
57. Hayo, B., 1998. Inflation culture, central bank independence and price stability. European Journal of Political Economy 14, 241-263.
58. Hayo, B., 1999a. Knowledge and attitude towards European Monetary Union. Journal of Policy Modeling 21, 641-651.
59. Hayo, B., 1999b. Public support for market reforms in Eastern Europe. Studies in Public Policy, vol. 321, Centre for the Study of Public Policy, Glasgow.
60. Hefeker, C., 1997. Interest Groups and Monetary Integration. The Political Economy of Exchange Regime Choice Westview Press, Boulder.
61. Hetzel, R., 1997. The case for a monetary rule in a constitutional democracy. Economic Quarterly - Federal Reserve Bank of Richmond 82, 45-65.
62. Hillman, A.L., 1999. Political culture and the political economy of central bank independence. In: Blejer, M., Skreb, M. (Eds.), Major Issues in Central Banking, Monetary Policy, and Implications for Transition Economies Kluwer Academic Publishing, Amsterdam, pp. 73-86.
63. Hofstede, G.H., 1980. Cultures Consequences: International Differences in Work-related Values. Beverly Sage Publications, Thousand Oaks, CA.
64. Issing, O., 1999. The Eurosystem: transparent and accountable or 'Willem in Euroland'. Journal of Common Market Studies 37, 503-519.
65. Jensen, H., 1997. Credibility of optimal monetary delegation. American Economic Review 87, 911-920.
66. Jerger, J., 2002. How strong is the case for a populist central banker? A note. European Economic Review 46, 623-632 .
67. Keefer, P., Stasavage, D., 2000. Bureaucratic delegation and political institutions: when are independent central banks irrelevant? World Bank Policy Research working paper 2356.
68. Kenen, P., 1995. Economic and Monetary Union in Europe. Moving Beyond Maastricht, Cambridge Univ. Press, New York.
69. Kydland, F.W., Prescott, E.C., 1977. Rules rather than discretion: the inconsistency of the optimal plans. Journal of Political Economy 85, 473-491.
70. Lawler, P., 2000. Centralised wage setting, inflation contracts, and the optimal choice of central banker. Economic Journal 110, 559-575.
71. Leertouwer, E., Maier, P., 2001. Who creates political business cycles: should central banks be blamed? European Journal of Political Economy 17, 445-463.
72. Lindner, A., 2000. Long term appointment of central bankers: costs and benefits. European Journal of Political Economy 16, 639-654.
73. Lippi, F., 1999. Strategic monetary policy with non-atomistic wage setters: a case for non-neutrality, CEPR discussion paper 2218.
74. Lippi, F., 2000. Median voter preferences, central bank independence and conservatism. Public Choice 105, 323-338.
75. Lippi, F., 2002. Revisiting the case for a populist central banker. European Economic Review 46, 601-612 .
76. Lohmann, S., 1992. Optimal commitment in monetary policy: credibility versus flexibility. American Economic Review 32, 273-286.
77. Loungani, P., Sheets, N., 1997. Central bank independence, inflation, and growth in transition economies. Journal of Money, Credit and Banking 29, 381-399.
78. Maier, P., Sturm, J.-E., de Haan, J., 2002. Political pressure on the Bundesbank: an empirical investigation using the Havrilesky approach. Journal of Macroeconomics, in press.
79. Mangano, G., 1998. Measuring central bank independence: a tale of subjectivity and of its consequences. Oxford Economic Papers 50, 468-492.
80. Maxfield, S., 1997. Gatekeppers of Growth: The International Political Economy of Central Banking in Developing Countries. Princeton Univ. Press, Princeton.
81. McCallum, B., 1995. Two fallacies concerning central-bank independence. American Economic Review 82, 273-286.
82. Moser, P., 1999. Checks and balances, and the supply of central bank independence. European Economic Review 43, 1569-1593.
83. Muscatelli, A., 1998. Optimal inflation contracts and inflation targets with uncertain central bank preferences: accountability through independence? Economic Journal 108, 529-542.
84. Muscatelli, A., Tirelli, P., Trecroci, C., 2000. Does institutional change really matter? Inflation targets, central bank reform and interest rate policy in the OECD countries. CESifo working paper 278.
85. Neumann, M.J.M., 1991. Precommitment by central bank independence. Open Economies Review 2, 95-112.
86. Obstfeld, M., Rogoff, K., 1996. Foundations of International Macroeconomics. MIT Press, Cambridge, MA.
87. Persson, T., Tabellini, G., 1993. Designing institutions for monetary stability. Carnegie-Rochester Conf. Ser. on Public Policy 39, 53-84.
88. Posen, A.S., 1993. Why central bank independence does not cause low inflation. In: O'Brian, R. (Ed.), Finance and the International Economy, vol. 7. The Amex Bank Review Prize Essays. Oxford Univ. Press, Oxford, pp. 40-65.
89. Posen, A., 1995. Declarations are not enough: financial sector sources of central bank independence. NBER Macroeconomic Annual 1995, Cambridge, MA.
90. Posen, A., 1998. Central bank independence and disinflationary credibility. A missing link? Oxford Economic Papers 50, 335-359.
91. Prast, H., 1996. Inflation, unemployment and the position of the central bank: the opinion of the public. Banca Nazionale del Lavoro Quarterly Review 49, 415-454.
92. Rogoff, K., 1985. The optimal degree of commitment to an intermediate monetary target. Quarterly Journal of Economics 100, 1169-1190.
93. Rose, R., 1998. What is the demand for price stability in post-communist countries? Problems of Post-Communism 45, 43-50.
94. Sieg, G., 1997. A model of partisan central banks and opportunistic business cycles. European Journal of Political Economy 13, 503-516.
95. Skott, P., 1997. Stagflationary consequences of prudent monetary policy in a unionized economy. Oxford Economic Papers 49, 609-622.
96. Soskice, D., Iversen, T., 2000. The non neutrality of monetary policy with large price or wage setters. Quarterly Journal of Economics 115, 265-284.
97. Svensson, L.E.O., 1997. Optimal inflation targets, 'conservative' central banks and linear inflation contracts. American Economic Review 87, 98-114.
98. Temple, J., 1998. Central bank independence and inflation: good news and bad news. Economics Letters 61, 215-219.
99. van Lelyveld, I., 1999a. Inflation or unemployment? Who cares? European Journal of Political Economy 15, 463-484.
100. van Lelyveld, I., 1999b. Inflation aversion in Europe. Paper presented at the EEA conference in Santiago de Compostela.
101. Vaubel, R., 1997a. The bureaucratic and partisan behavior of independent central banks: German and international evidence. European Journal of Political Economy 13, 201-224.
102. Vaubel, R., 1997b. Reply to Berger and Woitek. European Journal of Political Economy 13, 823-827.
103. Voigt, S., 2000. Institutionen kanalisieren Verhalten - zu verhaltensbeschraenkenden Wirkungen von unabhängiger Justiz und Zentralbank, Mimeo. University of Bochum, Department of Economics.
104. Waller, C.J., 2000. Policy boards and policy smoothing. Quarterly Journal of Economics 115, 305-339.
105. Walsh, C.E., 1995a. Optimal contracts for central bankers. American Economic Review 85, 150-167.
106. Walsh, C.E., 1995b. Is New Zealand's Reserve Bank Act of 1989 an optimal central bank contract? Journal of Money, Credit and Banking 27, 1179-1191.