| | |  | | | | Record from Web of Science® | | | | | | |
| Reflections on the current fashion for central bank independence |
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| Author(s): Bibow J |
| Source: CAMBRIDGE JOURNAL OF ECONOMICS Volume: 28 Issue: 4 Pages: 549-576 Published: JUL 1 2004 |
| Times Cited: 3 References: 119 |
| Abstract: This paper challenges the time-inconsistency case for central bank independence. It argues that the time-inconsistency literature not only seriously confuses the substance of the rules vs discretion debate, but also posits an implausible view of monetary policy. Most worryingly, the inflationary bias featured prominently in the time-inconsistency literature has encouraged the development of a dangerously one-sided approach to central bank independence which entirely ignores the potential risks involved in maximising central bankers' latitude for discretion. The analysis shows that a more balanced and symmetric approach to central bank independence is urgently needed. The views of Maynard Keynes and Milton Friedman are shown to shed some illuminating and disconcerting light on a fashionable free-lunch promise that is based on rather shallow theoretical foundations and empirical evidence. |
| Document Type: Review |
| Language: English |
| Reprint Address: Bibow, J (reprint author), Franklin Coll, Via Ponte Tresa 29, CH-6924 Lugano, Switzerland |
Addresses:
1. Franklin Coll, CH-6924 Lugano, Switzerland
2. Bard Coll, Levy Econ Inst, Annandale on Hudson, NY 12504 USA |
| Publisher: OXFORD UNIV PRESS, GREAT CLARENDON ST, OXFORD OX2 6DP, ENGLAND |
| Subject Category: Economics |
| IDS Number: 836LK |
| ISSN: 0309-166X |
| DOI: 10.1093/cje/beh013 |
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| | | | | | | | | Record from Web of Science® | | | | | | | | | |