In:
Journal of Money, Credit and Banking, Wiley, Vol. 51, No. 2-3 ( 2019-03), p. 289-312
Abstract:
Why are monetary authorities not elected like fiscal authorities are? Advanced economies pair an elected fiscal authority with an independent monetary authority. Replicating the advanced economies' structure with authorities microfounded by a political economy model shows that this structure is the solution to a constrained mechanism design problem that overcomes time inconsistency and results in the highest possible welfare. Goal and instrument independence, singly and in combination, are insufficient to minimize time inconsistency, though their combination is necessary.
Type of Medium:
Online Resource
ISSN:
0022-2879
,
1538-4616
DOI:
10.1111/jmcb.2019.51.issue-2-3
Language:
English
Publisher:
Wiley
Publication Date:
2019
detail.hit.zdb_id:
2010422-4
detail.hit.zdb_id:
218362-6
SSG:
3,2
Permalink