Central Banking As A Political Principal Agent Problem
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Central Banking As A Political Principal Agent Problem
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Author : Michele U. Fratianni
language : en
Publisher:
Release Date : 2014
Central Banking As A Political Principal Agent Problem written by Michele U. Fratianni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014 with categories.
Due to their ties with elected leaders, central bankers may pursue policies that are not in society's best interests. Consequently, the relationship between the public and the central bank can be characterized as a principal-agent problem. An inflation and a stabilization bias arise as a result of this agency problem and the magnitudes of these biases depend on the political environment. Various institutional proposals for eliminating these biases are examined, and we find that central bank independence and performance contracts work best. However, we argue that central bank independence is preferable for resolving the agency problem.
Central Banking As A Political Principal Agent Problem
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Author : Michele Fratianni
language : en
Publisher:
Release Date : 1993
Central Banking As A Political Principal Agent Problem written by Michele Fratianni and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1993 with Banks and banking, Central categories.
A Political Agency Theory Of Central Bank Independence
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Author : Mr.Eric Le Borgne
language : en
Publisher: International Monetary Fund
Release Date : 2003-07-01
A Political Agency Theory Of Central Bank Independence written by Mr.Eric Le Borgne and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-07-01 with Business & Economics categories.
We propose a theory to explain why, and under what circumstances, a politician gives up rent and delegates policy tasks to an independent agency. We apply this theory to monetary policy by extending a standard dynamic "New-Keynesian" stochastic general equilibrium model. This model gives a new theory of central bank independence that is unrelated to the standard inflation bias problem. We derive several new predictions and show that they are consistent with the data. Finally, we show that while instrument independence of the central bank is desirable, goal independence is not.
A Political Agency Theory Of Central Bank Independence
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Author : Gauti B. Eggertsson
language : en
Publisher:
Release Date : 2006
A Political Agency Theory Of Central Bank Independence written by Gauti B. Eggertsson and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with categories.
We propose a theory to explain why, and under what circumstances, a politician gives up rent and delegates policy tasks to an independent agency. We apply this theory to monetary policy by extending a standard dynamic New-Keynesian stochastic general equilibrium model. This model gives a new theory of central bank independence that is unrelated to the standard inflation bias problem. We derive several new predictions and show that they are consistent with the data. Finally, we show that while instrument independence of the central bank is desirable, goal independence is not.
Public Governance Of Central Banks
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Author : Yoshiharu Oritani
language : en
Publisher:
Release Date : 2010
Public Governance Of Central Banks written by Yoshiharu Oritani and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2010 with Banks and banking, Central categories.
The governance of central banks has two dimensions: corporate governance and public governance. Public governance is an institutional framework whereby the general public governs a central bank by and through the legislative and executive bodies in a country. This paper argues that the literature of new institutional economics sheds new light on the public governance of central banks. First, Williamson's theory of 'governance as integrity' (probity) is applied to the internal management of central banks. Moe's theory of 'public bureaucracy' is applied to the concept of central bank independence. Second, we apply agency theory to the issues associated with central bank independence and accountability. Third, public choice theory is applied to central bank independence.
Bankers Bureaucrats And Central Bank Politics
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Author : Christopher Adolph
language : en
Publisher: Cambridge University Press
Release Date : 2013-04-15
Bankers Bureaucrats And Central Bank Politics written by Christopher Adolph and has been published by Cambridge University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-04-15 with Political Science categories.
Most studies of the political economy of money focus on the laws protecting central banks from government interference; this book turns to the overlooked people who actually make monetary policy decisions. Using formal theory and statistical evidence from dozens of central banks across the developed and developing worlds, this book shows that monetary policy agents are not all the same. Molded by specific professional and sectoral backgrounds and driven by career concerns, central bankers with different career trajectories choose predictably different monetary policies. These differences undermine the widespread belief that central bank independence is a neutral solution for macroeconomic management. Instead, through careful selection and retention of central bankers, partisan governments can and do influence monetary policy - preserving a political trade-off between inflation and real economic performance even in an age of legally independent central banks.
Unelected Power
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Author : Paul Tucker
language : en
Publisher: Princeton University Press
Release Date : 2019-09-10
Unelected Power written by Paul Tucker and has been published by Princeton University Press this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-09-10 with Business & Economics categories.
How central banks and independent regulators can support rather than challenge constitutional democracy Unelected Power lays out the principles needed to ensure that central bankers and other independent regulators act as stewards of the common good. Blending economics, political theory, and public law, this critically important book explores the necessary conditions for delegated but politically insulated power to be legitimate in the eyes of constitutional democracy and the rule of law. It explains why the solution must fit with how real-world government is structured, and why technocrats and their political overseers need incentives to make the system work as intended. Now with a new preface by Paul Tucker, Unelected Power explains how the regulatory state need not be a fourth branch of government free to steer by its own lights, and how central bankers can emulate the best of judicial self-restraint.
The Delegation Mandate Of The European Central Bank During The Euro Crisis
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Author : Tony Müller
language : en
Publisher: GRIN Verlag
Release Date : 2014-07-29
The Delegation Mandate Of The European Central Bank During The Euro Crisis written by Tony Müller and has been published by GRIN Verlag this book supported file pdf, txt, epub, kindle and other format this book has been release on 2014-07-29 with Political Science categories.
Bachelor Thesis from the year 2014 in the subject Politics - Topic: European Union, grade: 1,7, Dresden Technical University, language: English, abstract: On September 6, 2012, the President of the ECB, Mario Draghi, announced that the ECB "will do whatever it takes [...] to preserve the euro" (Draghi, 2012b). Due to the unfavorable economic situation and the emerging fear of an involuntary break-up of the Eurozone, the Governing Council decided to launch the OMTs program that would allow the ECB to buy unlimited government bonds from countries of the Eurozone on the secondary market. This announcement led to a subject of considerable political debate across the world. It is with this background in mind that the research question arises: Did the European Central Bank exceed its mandate by announcing the bond-buying program, outright monetary transactions (OMTs)? This paper will show that the principals’ preferences heterogeneity with regard to different crisis solution approaches changes when it comes to the survival of the Eurozone. Thus, the agent was given more discretion to do everything to defend the Euro as a common goal. The aim of this contribution is to answer the research question from a principal-agent perspective, not to provide a jurisprudential or economic analysis of the issue. Therefore, the decision of the German Federal Constitution Court will not be included in the following work. The remainder of this paper is organized as follows: The first part gives a brief introduction to the main assumptions of the PA approach. The next chapter discusses the ECB as an institution, together with the framework and the design of its mandate to consider the level of autonomy of the ECB and which gaps in the policy-making authority could occur. The third part outlines the technical features of the announced OMTs program to see if the bond-buying program is in accordance with the mandate. Then, the debate on this program from a PA perspective becomes the focus. The final chapter summarizes the paper.
The Japanese Central Banking System Compared With Its European And American Counterparts
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Author : Yoshiharu Oritani
language : en
Publisher: Springer
Release Date : 2019-07-09
The Japanese Central Banking System Compared With Its European And American Counterparts written by Yoshiharu Oritani and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2019-07-09 with Business & Economics categories.
This book uniquely explores the role and governance mechanism of central banks by applying new institutional economics (NIE). Simultaneously, the book tests the analytical viability of NIE when applied to an organization that has both public and private characteristics. Special attention is paid to the Bank of Japan (BOJ) based on the author’s 30 years of work experience and “participant observation” there, touching upon discussion of central bank independence. The book argues that central bank independence cannot be defended solely by law, and a mechanism to eliminate requests from politicians needs to be embedded within the governance structure. The book also provides a comparative analysis between the BOJ and central banks in Europe and the USA. In reviewing the global financial crisis of 2008–2009, it suggests possible measures based on behavioral economics and public choice theory. These theory-based analyses provide useful insights when considering matters such as whether a central bank should issue electronic money or the European system of central banks could be established in Asia.
Challenges For Central Banking
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Author : Anthony M. Santomero
language : en
Publisher: Springer Science & Business Media
Release Date : 2013-03-09
Challenges For Central Banking written by Anthony M. Santomero and has been published by Springer Science & Business Media this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013-03-09 with Business & Economics categories.
It may be possible to claim that, generally speaking, central banks around the world have never before held such a central and well-respected position in their respective countries as they hold now. Their tasks seem to be reasona bly well defined and the mandate given to them to guarantee price stability has so far worked more successfully than was perhaps expected. Inflation is lower than it has been for a long time. One central bank after the other has been given a position independent of normal party political processes. Re search concerning monetary policy and other topics of relevance for central banking has made good progress during the past decade. Much of the mys tique that has typically surrounded the internal work and decision-making of central banks has gradually disappeared. Instead, openness and transparency have become the key words of the day. The communication channels of central banks; speeches, inflation reports, minutes of meetings, etc. receive considerable attention and often give rise to headlines in the media. The en vironment in which central banks work and act today has thus undergone changes that in my view are very positive. However, we should always be on our guard against complacency. It would be most dangerous for central bankers today to sit back and relax in the belief that all of the important problems have been resolved and need no further consideration. Unless central bankers remain constantly alert and vigilant, their policy-making can easily deteriorate.