Abstract The notion that an independent central bank reduces a country’s inflation is controversial hypothesis. To date, it has not been possible to satisfactorily answer this question because the complex macroeconomic structure gives rise data adequately incorporated into statistical analyses. We develop causal model summarizes economic process of inflation. Based on and recent data, we discus...

The likely extension of the euro area has triggered a debate on the organization of the ECB, in particular on the apparent mismatch between relative economic size and voting rights in the Council. We present a simple model of optimal representation in a federal central bank addressing this question. Optimal voting weights reflect two opposing forces: the wish to insulate common monetary policy ...

Certainly, some aspects of the framework will, in my view, have to survive the crisis. The first aspect is central bank independence and, at least in the EU context, the prohibition of government debt monetisation. The second aspect is the centrality of price stability for monetary policy. And the third aspect is the importance of transparent communication. The crisis has not at all discredited...

Many studies suggest that either partisan governments, labor market centralization, or central bank independence affect unemployment, but none consider the full range of interactions among these institutions. I offer a fully interactive model of unemployment and test it using quarterly data from fifteen industrialized democracies over 24 years. Confiming earlier work, I find central bank indepe...