DP3278 Credibility and Flexibility with Monetary Policy Committees
|Author(s):||Ilian Mihov, Anne Sibert|
|Publication Date:||March 2002|
|Keyword(s):||inflationary bias, monetary policy committee, output stabilization, reputation|
|JEL(s):||E42, E52, E58|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=3278|
We consider independent monetary policy committees as a simple way of attaining relatively low inflation without completely sacrificing the stabilization role of monetary policy. If central banker's types are unknown, then for a wide range of parameters an independent monetary policy committee is better than either a mandated zero-inflation rule or discretionary policy conducted by an opportunistic central banker.