Challenges in central banking : the current institutional environment and forces affecting monetary policy /

Challenges in central banking : the current institutional environment and forces affecting monetary policy /

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Bibliographic Details
Imprint:New York : Cambridge University Press, 2010.
Description:xviii, 398 p. : ill. ; 24 cm.
Language:English
Subject:
Banks and banking, Central.
Monetary policy.
Banks and banking, Central.
Monetary policy.
Format: Print Book
URL for this record:http://pi.lib.uchicago.edu/1001/cat/bib/8008477
Hidden Bibliographic Details
Other authors / contributors:Siklos, Pierre L., 1955-
Bohl, Martin T.
Wohar, Mark E.
ISBN:9780521199292 (hbk)
0521199298 (hbk)
Notes:Includes bibliographical references and index.
Summary:"Changes in the field of central banking over the past two decades have been nothing short of dramatic. Moreover, they have spanned the globe. They include the importance of central bank autonomy, the desirability of low and stable inflation, and the vital role played by how central banks communicate their views and intentions to the markets and the public more generally. There remains considerable diversity nevertheless in the institutional framework affecting central banks, the manner in which the stance of monetary policy is determined and assessed, and the forces that dictate the conduct of monetary policy more generally. The global financial crisis, which began in the United States in 2007, only serves to highlight further the importance of central bank policies. The aim of this volume is to take stock of where we are in the realm of the practice of central banking and considers some of the implications arising from the ongoing crisis"--Provided by publisher.
Table of Contents:
  • List of Tables, Figures, and Appendices
  • List of Contributors
  • Preface
  • 1. The State of Play in Central Banking and the Challenges to Come
  • 1.1. Introduction
  • 1.2. Part I: Past, Present, and Future in the Conduct of Monetary Policy
  • 1.3. Part II: The Scope of Central Banking Operations and Central Bank Independence
  • 1.4. Part III: Transparency and Governance in Central Banking
  • Part I. Past, Present, and Future in the Conduct of Monetary Policy
  • 2. Is the Time Ripe for Price-Level Path Stability?
  • 2.1. Introduction
  • 2.2. The Case for Price-Level Stability
  • 2.2.1. The Optimality of Price-Level Stability in the New Keynesian Model
  • 2.2.2. Price-Level Stability, Zero Lower Bound, and Deflationary Spirals
  • 2.2.3. Going Beyond the Basic New Keynesian Model
  • 2.3. Two Objections to PLPS
  • 2.3.1. Unrealistic Reliance on Credibility
  • 2.3.2. Uncertainty and Price-Level Stability
  • 2.4. Conclusions
  • 3. The Principal-Agent Approach to Monetary Policy Delegation
  • 3.1. Introduction
  • 3.2. Background, History, and Context
  • 3.3. Time Inconsistency, Discretion, and Central Banker Contracts
  • 3.3.1. Commitment and Optimal Policy
  • 3.3.2. Consistent Policy
  • 3.3.3. Explicit Contracts as a Remedy for Time Inconsistency
  • 3.3.4. Contracts and the Selfish Central Banker
  • 3.4. Selected Literature Review
  • 3.4.1. Solutions to Inconsistency of Optimal Plans
  • 3.4.2. Monetary Policy under Contracts and Incomplete Information
  • 3.5. Conclusion
  • 4. Implementing Monetary Policy in the 2000s: Operating Procedures in Asia and Beyond
  • 4.1. Introduction
  • 4.2. The Institutional Aspects of Monetary Policy Decisions
  • 4.3. The Operational Objectives of Monetary Policy Implementation
  • 4.4. Demand for Reserves
  • 4.5. Supply of Reserves
  • 4.5.1. Standing Facilities: Evolving Roles
  • 4.5.2. Discretionary Operations
  • 4.5.3. Putting the Pieces Together
  • 4.6. Concluding Remarks: And the Evolution Continues
  • Part II. The Scope of Central Banking Operations and Central Bank Independence
  • 5. Analysis of Financial Stability
  • 5.1. Introduction: The Financial Stability Role of Central Banks
  • 5.2. Historical Development of the Financial Stability Role of Central Banks
  • 5.3. The Functions of a Central Bank in the Provision of Financial Stability
  • 5.4. Recent Challenges to the Financial Stability Role of Central Banks
  • 5.5. Is There a Theoretical Basis for the Conduct of Financial Stability?
  • 5.6. Conclusions
  • 6. National Central Banks in a Multinational System
  • 6.1. Introduction
  • 6.2. Monetary Stability
  • 6.3. Financial Stability
  • 6.4. Failure Through Loss of Liquidity
  • 6.5. Internationalization and Classic LOLR
  • 6.6. An International LOLR?
  • 6.7. Failure Through Loss of Capital
  • 6.8. Dealing with Failure
  • 6.9. Cross-Border Institutional Structures that Renationalize the Problem
  • 6.10. Cross-Border Institutional Structures with Joint Responsibility
  • 6.11. Adequate Powers
  • 6.12. Preventing Problems
  • 6.13. Cross-Border Financial Markets
  • 6.14. Some Historical Evidence
  • 6.15. Conclusion
  • 7. The Complex Relationship between Central Bank Independence and Inflation
  • 7.1. Introduction
  • 7.2. The Conventional View of Central Bank Independence
  • 7.3. Problems with the Conventional View
  • 7.3.1. Independence and Conservatism
  • 7.3.2. Independence and Accountability
  • 7.3.3. Credibility and Removal of Independence
  • 7.4. Alternatives to Central Bank Independence
  • 7.4.1. Fixed Exchange Rates, Currency Boards, and Monetary Union
  • 7.4.2. Inflation Contracts and Targets
  • 7.4.3. Labor Market Institutions
  • 7.5. Alternative Explanations of Low Inflation
  • 7.5.1. Central Bank Independence Is an Endogenous Variable
  • 7.5.2. National Inflation Cultures
  • 7.5.3. Political Interest Groups
  • 7.5.4. Legal System, Political System, and Factual CBI
  • 7.6. Conclusion
  • 8. Independence and Accountability in Supervision Comparing Central Banks and Financial Authorities
  • 8.1. Introduction
  • 8.2. Designing Supervisory Governance: Hints from the Central Banking Literature on Monetary Policy
  • 8.3. Defining Independence and Accountability in Financial Supervision
  • 8.4. Governance of Supervisory Function: Main Findings
  • 8.4.1. Sample and Methodology
  • 8.4.2. Main Findings
  • 8.4.3. Impact of the Location and Comparison with Monetary Policy
  • 8.5. The Determinants of Supervisory Governance
  • 8.5.1. The Econometric Approach
  • 8.5.2. The Results
  • 8.6. Conclusions
  • Part III. Transparency and Governance in Central Banking
  • 9. The Economic Impact of Central Bank Transparency: A Survey
  • 9.1. Introduction
  • 9.2. Theoretical Findings
  • 9.2.1. Cukierman and Meltzer (1986)
  • 9.2.2. Coordination
  • 9.2.3. Committees
  • 9.2.4. Learning
  • 9.2.5. Conclusion on Theory
  • 9.3. Empirical Evaluations of Transparency
  • 9.3.1. Policy Anticipation
  • 9.3.2. Synchronization of Forecasts
  • 9.3.3. Macroeconomic Variables
  • 9.3.4. Credibility, Reputation, and Flexibility
  • 9.3.5. Cross-Country Comparisons
  • 9.4. Overall Conclusion
  • 10. How Central Banks Take Decisions: An Analysis of Monetary Policy Meetings
  • 10.1. Introduction
  • 10.2. The Impact of Committees on Decision Making
  • 10.2.1. The Benefits of Committee Decision Making
  • 10.2.2. The Costs of Committee Decision Making
  • 10.2.3. Implications for Committee Design
  • 10.3. Monetary Policy Committees in Practice
  • 10.3.1. Clear Objectives and Independence
  • 10.3.2. The Structure of the Monetary Policy Meeting
  • 10.4. Conclusions
  • 11. Institutional Rules and the Conduct of Monetary Policy: Does a Central Bank Need Governing Principles?
  • 11.1. Introduction
  • 11.2. The "Wisdom of Men" Versus Rules
  • 11.2.1. Trustworthiness in the Central Bank and Its Determinants
  • 11.2.2. Central Bank Signaling Costs and Trust
  • 11.3. Data and Econometric Specification
  • 11.4. Empirical Evidence
  • 11.5. Conclusions
  • Index

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