The equilibrium degree of transparency and control in monetary policy

被引:41
作者
Faust, J [1 ]
Svensson, LEO
机构
[1] Fed Reserve Syst, Board Governors, Div Int Finance, Washington, DC 20551 USA
[2] Princeton Univ, Princeton, NJ 08544 USA
关键词
D O I
10.1353/mcb.2002.0037
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
We examine a central bank's endogenous choice of degree of control and degree of transparency, under both commitment and discretion. We argue that discretion is the more realistic assumption for the choice of control and that commitment is more realistic for the choice of transparency. For the choice of control, under discretion maximum degree of control is the only equilibrium. For die choice of transparency, under commitment, a sufficiently patient bank with sufficiently low average inflation bias will always choose minimum transparency. Thus, a maximum feasible degree of control with a minimum degree of transparency is a likely outcome. The Bundesbank and the Federal Reserve System are, arguably, examples of this.
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页码:520 / 539
页数:20
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