Quasi-Fiscal Policies of Independent Central Banks and Inflation

Inflation Bias, Time Inconsistency of Monetary and Fiscal Policies and Institutional Quality

In developing countries, weak institutional quality can increase the probability of applying discretionary policies and can have a great impact on their double-digit inflation. Surico (2008) calculated inflation bias, but he considered just monetary policy and he did not pay attention to the institutions. Therefore, we design a model which considers the discretion in monetary and fiscal policie...

The Threshold Impact of Fiscal and Monetary Policies on Inflation: Threshold Model Approach

The aim of this study is to examine the nonlinear effects of fiscal and monetary policies on inflation during 1990:3 to 2013:1 based on threshold model. First lag of the liquidity growth is recognized as threshold variable with threshold value estimated at 6.37 percent. In low liquidity growth, the results indicate that inflation expectations and the lagged liquidity growth are the most importa...

Inflation , Growth and Central Banks : Theory and Evidence

The Politics of Independent Central Banks

Central banks have long played a far larger role in policy-making than their legalmandates might imply. In recent years their power and influence have become even greater. Since the financial crisis, public banks around the world have taken on more direct responsibilities for financial supervision and regulation, and pushed monetary policy to new limits in order to stimulate the global economy....

How Should Central Banks Reduce Inflation?—Conceptual Issues

It is tempting to give a very short answer to the title of the session—raise interest rates and reduce monetary growth. But when and by how much? That raises two questions which are central to the design of monetary policy. First, starting from an inflationary episode, how quickly should inflation be reduced to its desired level? Second, should monetary policy react to shocks to output as well ...