DP563 The European Central Bank: Reshaping Monetary Politics in Europe

Author(s): Alberto F Alesina, Vittorio Grilli
Publication Date: July 1991
Keyword(s): Central Bank Independence, ECB, European Monetary System, Political Economy
JEL(s): 432
Programme Areas: International Macroeconomics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=563

This paper studies how the creation of a European Central Bank (ECB) will change the political economy of monetary policy in Europe. The 12 governors of the EC member countries national central banks of the EEC have recently proposed a statute which delineates the institutional structure of the ECB. In this paper, we discuss the likely impact of this proposed structure on the conduct of monetary policy at the European level, particularly from the point of view of the trade-off between inflation and stabilization. We analyse the role of the political independence of the ECB and the effect on policy choices of voting rules for appointing ECB board members