Transitions in Central Bank Leadership

73 Pages Posted: 11 Jul 2017

See all articles by Carlos Carvalho

Carlos Carvalho

Government of the Federative Republic of Brazil - Central Bank of Brazil; Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics

Tiago Flórido

Harvard University

Eduardo Zilberman

Central Bank of Chile - Economic Research

Date Written: July 6, 2017

Abstract

We assemble a novel dataset on transitions in central bank leadership in several countries, and study how monetary policy is conducted around those events. We find that policy is tighter both at the last meetings of departing governors and first meetings of incoming leaders. This finding cannot be fully explained by endogenous transitions, the effects of the zero lower bound, surges in inflation expectations, omitted variables such as fiscal policy and uncertainty nor electoral cycles. We conclude by offering two possible, perhaps complementary, explanations for these results. One based on a simple signalling story, another based on career and reputation concerns.

Keywords: monetary policy, transitions, central bank leadership, signalling, career concerns

JEL Classification: E43, E52, E58, E65

Suggested Citation

Carvalho, Carlos and Flórido, Tiago and Zilberman, Eduardo, Transitions in Central Bank Leadership (July 6, 2017). Available at SSRN: https://ssrn.com/abstract=2997879 or http://dx.doi.org/10.2139/ssrn.2997879

Carlos Carvalho

Government of the Federative Republic of Brazil - Central Bank of Brazil ( email )

P.O. Box 08670
SBS Quadra 3 Bloco B - Edificio-Sede
Brasilia, Distr. Federal 70074-900
Brazil

Pontifical Catholic University of Rio de Janeiro (PUC-Rio) - Department of Economics ( email )

Rua Marques de Sao Vicente, 225/206F
Rio de Janeiro, RJ 22453
Brazil

HOME PAGE: http://https://sites.google.com/site/cvianac2/carloscarvalho

Tiago Flórido

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Eduardo Zilberman (Contact Author)

Central Bank of Chile - Economic Research ( email )

United States

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