Discussion paper

DP761 Delegation in International Monetary Policy Games

In this paper we show that the delegation of monetary policy to an independent and more conservative central banker is an optimal policy in an international context with monetary spillovers between countries, even in the absence of time inconsistency (credibility) issues. We also study the welfare implications of delegating monetary policy and extend our analysis to incorporate the coordination of monetary policies.

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Citation

Padilla, J, J Dolado and M Griffiths (1993), ‘DP761 Delegation in International Monetary Policy Games‘, CEPR Discussion Paper No. 761. CEPR Press, Paris & London. https://cepr.org/publications/dp761