Transparent rules for deposing central bankers
I model flexible targeting with linear and quadratic loss function in the output gap and inflation rate. I find a form of targeting with one-sided dismissal rules attractive; it discourages the central banker from inflating and minimizes the probability of its dismissal in the presence of aggregate...
محفوظ في:
| المؤلف الرئيسي: | |
|---|---|
| التنسيق: | article |
| منشور في: |
2015
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| الوصول للمادة أونلاين: | http://hdl.handle.net/10725/3852 http://dx.doi.org/10.1016/j.iref.2015.01.005 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.sciencedirect.com/science/article/pii/S1059056015000118 |
| الوسوم: |
إضافة وسم
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| _version_ | 1864513462436102144 |
|---|---|
| author | Arayssi, Mahmoud |
| author_facet | Arayssi, Mahmoud |
| author_role | author |
| dc.creator.none.fl_str_mv | Arayssi, Mahmoud |
| dc.date.none.fl_str_mv | 2015 2016-05-19T13:04:48Z 2016-05-19T13:04:48Z 2016-05-19 |
| dc.identifier.none.fl_str_mv | 1059-0560 http://hdl.handle.net/10725/3852 http://dx.doi.org/10.1016/j.iref.2015.01.005 Arayssi, M. (2015). Transparent rules for deposing central bankers. International Review of Economics & Finance, 38, 1-17. http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.sciencedirect.com/science/article/pii/S1059056015000118 |
| dc.language.none.fl_str_mv | en |
| dc.relation.none.fl_str_mv | International Review of Economics & Finance |
| dc.rights.*.fl_str_mv | info:eu-repo/semantics/openAccess |
| dc.title.none.fl_str_mv | Transparent rules for deposing central bankers |
| dc.type.none.fl_str_mv | Article info:eu-repo/semantics/publishedVersion info:eu-repo/semantics/article |
| description | I model flexible targeting with linear and quadratic loss function in the output gap and inflation rate. I find a form of targeting with one-sided dismissal rules attractive; it discourages the central banker from inflating and minimizes the probability of its dismissal in the presence of aggregate supply shocks. This procedure ties the central banker's performance to observable policy targets, whether the nominal output or the inflation rate, and gives some valuable flexibility in terms of stabilization of shocks Two cases of targeting procedures, nominal output targeting and inflation targeting, are compared to the full discretionary case without any dismissal rule. The central banker, accountable to hit the policy target, implements a dominant policy whenever she takes a hawkish stance against inflation, and targets the variable that is most affected by the unobservable supply shock. This type of reappointment contract implies that monetary policy would become fully transparent, consistently more credible and more effective than the discretionary case without dismissal. |
| eu_rights_str_mv | openAccess |
| format | article |
| id | LAURepo_de1df85aa929dc34868db7dbf0ecab57 |
| identifier_str_mv | 1059-0560 Arayssi, M. (2015). Transparent rules for deposing central bankers. International Review of Economics & Finance, 38, 1-17. |
| language_invalid_str_mv | en |
| network_acronym_str | LAURepo |
| network_name_str | Lebanese American University repository |
| oai_identifier_str | oai:laur.lau.edu.lb:10725/3852 |
| publishDate | 2015 |
| repository.mail.fl_str_mv | |
| repository.name.fl_str_mv | |
| repository_id_str | |
| spelling | Transparent rules for deposing central bankersArayssi, MahmoudI model flexible targeting with linear and quadratic loss function in the output gap and inflation rate. I find a form of targeting with one-sided dismissal rules attractive; it discourages the central banker from inflating and minimizes the probability of its dismissal in the presence of aggregate supply shocks. This procedure ties the central banker's performance to observable policy targets, whether the nominal output or the inflation rate, and gives some valuable flexibility in terms of stabilization of shocks Two cases of targeting procedures, nominal output targeting and inflation targeting, are compared to the full discretionary case without any dismissal rule. The central banker, accountable to hit the policy target, implements a dominant policy whenever she takes a hawkish stance against inflation, and targets the variable that is most affected by the unobservable supply shock. This type of reappointment contract implies that monetary policy would become fully transparent, consistently more credible and more effective than the discretionary case without dismissal.PublishedN/A2016-05-19T13:04:48Z2016-05-19T13:04:48Z20152016-05-19Articleinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/article1059-0560http://hdl.handle.net/10725/3852http://dx.doi.org/10.1016/j.iref.2015.01.005Arayssi, M. (2015). Transparent rules for deposing central bankers. International Review of Economics & Finance, 38, 1-17.http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.phphttp://www.sciencedirect.com/science/article/pii/S1059056015000118enInternational Review of Economics & Financeinfo:eu-repo/semantics/openAccessoai:laur.lau.edu.lb:10725/38522021-03-19T09:10:05Z |
| spellingShingle | Transparent rules for deposing central bankers Arayssi, Mahmoud |
| status_str | publishedVersion |
| title | Transparent rules for deposing central bankers |
| title_full | Transparent rules for deposing central bankers |
| title_fullStr | Transparent rules for deposing central bankers |
| title_full_unstemmed | Transparent rules for deposing central bankers |
| title_short | Transparent rules for deposing central bankers |
| title_sort | Transparent rules for deposing central bankers |
| url | http://hdl.handle.net/10725/3852 http://dx.doi.org/10.1016/j.iref.2015.01.005 http://libraries.lau.edu.lb/research/laur/terms-of-use/articles.php http://www.sciencedirect.com/science/article/pii/S1059056015000118 |