Independence, Conservatism and Beyond: Central Bank Design and Central Banker Preferences in Monetary Policy Economics (1981-2019)

46 Pages Posted: 13 Apr 2020

See all articles by Donato Masciandaro

Donato Masciandaro

Bocconi University - Department of Economics

Date Written: April 2020

Abstract

Using a political economy approach, this paper sheds light on how two factors – central bankers’ preferences and the central bank’s design – progressively assumed a crucial role in the evolution of monetary policy economics in the last four decades. The two factors jointly identify the importance of central bank governance in influencing monetary policy decisions through their interactions with the monetary policy rules, given certain assumptions about how macroeconomic systems work. Moreover, our understanding of the relevance of central bank governance has recently been enriched by applying the behavioural economics perspective.

Keywords: monetary policy, central bank independence, central banker conservatism, monetary policy committees, political economics, behavioural economics

JEL Classification: E50, E52, E58

Suggested Citation

Masciandaro, Donato, Independence, Conservatism and Beyond: Central Bank Design and Central Banker Preferences in Monetary Policy Economics (1981-2019) (April 2020). BAFFI CAREFIN Centre Research Paper No. 2020-136, Available at SSRN: https://ssrn.com/abstract=3572695 or http://dx.doi.org/10.2139/ssrn.3572695

Donato Masciandaro (Contact Author)

Bocconi University - Department of Economics ( email )

Via Gobbi 5
Milan, 20136
Italy

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