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Title:
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Designing the Optimal Conservativeness of the Central Bank
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Author:
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Ferré Carracedo, Montserrat; Manzano, Carolina
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Other authors:
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Universitat Rovira i Virgili. Departament d'Economia; Universitat Rovira i Virgili. Centre de Recerca en Economia Industrial i Economia Pública |
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Abstract:
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In this paper we propose a new measure of the degree of conservativeness of an inde-
pendent central bank and we derive the optimal value from the social welfare perspective.
We show that the mere appointment of an independent central bank is not enough to
achieve lower inflation, which may explain the mixed results found between central bank
independence and inflation in the empirical literature. Further, the optimal central bank
should not be too conservative. For instance, we will show that in some circumstances it
will be optimal that the central bank is less conservative than society in the Rogoff sense.
JEL classification: E58, E63.
Keywords: Central bank; Conservativeness; Independence. |
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Publication date:
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2011 |
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Subject (UDC):
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35 - Administració pública. Govern. Assumptes militars |
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Subject(s):
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Bancs centrals |
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Rights:
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L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons: http://creativecommons.org/licenses/by-nc-nd/3.0/es/ |
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Pages:
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17 p. |
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Document type:
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Working Paper |
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Published by:
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Universitat Rovira i Virgili. Departament d'Economia
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Collection:
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Documents de treball del Departament d'Economia;2011-26
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