This paper assesses the relative effectiveness of central bank independence vs. policy rules for the policy instruments in bringing about good economic performance. It examines historical changes in (1) macroeconomic performance, (2) the adherence to rulesbased monetary policy, and (3) the degree of central bank independence. Macroeconomic performance is defined in terms of both price stability...

We consider the optimality of various institutional arrangements for agencies that conduct macro-prudential regulation and monetary policy. When a central bank is in charge of price and financial stability, a new time inconsistency problem may arise. Ex-ante, the central bank chooses the socially optimal level of inflation. Ex-post, however, the central bank chooses inflation above the social o...

Traditionally, financial systems have been bank-based or market-based. The efficiency properties of these systems are compared in various dimensions. These include risk sharing, information provision, funding new industries, corporate governance, and law, finance and politics. Both systems have advantages and disadvantages. With regard to stability, both bank-based and market-based systems are ...

The purpose of this study was to determine the effect microprudential policy as measured by liquidity risk (LDR), credit (NPF), market (NIM) and operational (BOPO) on stability state-owned banks in Indonesia using Z-score. Where sample uses a purposive sampling method obtained 7 BUMN Panel Data Regression analysis. tool used research is Eviews 12.0. results found that has significant posi-tive ...

ISSN 0428-1276 Low inflation over long periods is the sign of an effective central bank. The authors suggest that a large fraction of the worldwide decline in inflation since the early 1980s results from an international movement toward more independent central banks. Industrialized nations have achieved a remarkable decline in inflation: Their average annual rate tumbled from 5.6% in the 1955–...