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Modern Monetary Policy and Central Bank Governance

Edited by Sylvester Eijffinger, Professor of Economics, Tilburg University, the Netherlands and CEPR and Donato Masciandaro, Professor of Economics, Bocconi University, Milan, Italy, and SUERF
There has been a recent evolution in the relationship between modern monetary policy and central banking, visible in the now merged study of public economic choices made every day and the features of monetary architectures and institutions. Though previously separate focuses, these are now accepted by academic scholars and policymakers to be two critical areas that are intrinsically linked.
Extent: 704 pp
Hardback Price: $375.00 Web: $337.50
Publication Date: 2014
ISBN: 978 1 78347 297 0
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  • Economics and Finance
  • Financial Economics and Regulation
  • Money and Banking
There has been a recent evolution in the relationship between modern monetary policy and central banking, visible in the now merged study of public economic choices made every day and the features of monetary architectures and institutions. Though previously separate focuses, these are now accepted by academic scholars and policymakers to be two critical areas that are intrinsically linked.

Modern Monetary Policy and Central Bank Governance explores this change by bringing together the best research from experts in the field to achieve a comprehensive examination of the subject, innovatively addressing its two critical angles in a single volume.
‘In the aftermath of the crisis, redesigning the institutional framework governing money and finance to foster financial stability has become a priority. This volume brings together key contributions that help elucidate the economic and political complexity that must be addressed to improve the governance of central banks and their contribution to economic and financial stability.’
– Athanasios Orphanides, Professor of the Practice of Global Economics and Management, MIT Sloan School of Management
25 articles, dating from 1981 to 2008
Contributors include: T.J. Sargent, R. Barro, K.S. Rogoff, B. Bernanke, M. Woodford, J.B. Taylor, G. Tabellini, L.E.O. Svensson, A.Cukierman, C. Goodhart
Contents
Acknowledgements
Introduction Sylvester Eijffinger and Donato Masciandaro

PART I MONETARY POLICY: HOW TO GOVERN MONEY AND INTEREST RATES

A New Classical View: Rational Expectations, Monetary Policy and Central Bankers

1. Thomas J. Sargent and Neil Wallace (1981), ‘Some Unpleasant Monetarist Arithmetic’
2. Robert J. Barro and David B. Gordon (1983), ‘Rules, Discretion and Reputation in a Model of Monetary Policy’
3. Kenneth Rogoff (1985), ‘The Optimal Degree of Commitment to an Intermediate Monetary Target’
4. Susanne Lohmann (1992), ‘Optimal Commitment in Monetary Policy: Credibility Versus Flexibility’
5. Sylvester C.W. Eijffinger and Marco Hoeberichts (1998), ‘The Trade Off Between Central Bank Independence and Conservativeness’

B New Keynesian View: Market Imperfections, Monetary Policy and Real Effects

6. Ben S. Bernanke and Mark Gertler (1995), ‘Inside the Black Box: The Credit Channel of Monetary Policy Transmission’
7. Richard Clarida, Jordi Galí and Mark Gertler (1999), ‘The Science of Monetary Policy: A New Keynesian Perspective’
8. Michael Woodford (2003), ‘Optimal Interest-Rate Smoothing

C Merging the Views: Monetary Policy and the Engineering of Rules and Institutions

9. John B. Taylor (1993), ‘Discretion Versus Policy Rules in Practice’
10. Dale W. Henderson and Warwick J. McKibbin (1993), ‘A Comparison of Some Basic Monetary Policy Regimes for Open Economies: Implications of Different Degrees of Instrument Adjustment and Wage Persistence’
11. Torsten Persson and Guido Tabellini (1993), ‘Designing Institutions for Monetary Stability’
12. Carl E. Walsh (1995), ‘Optimal Contracts for Central Bankers’
13. Lars E.O. Svensson (1997), ‘Optimal Inflation Targets, “Conservative” Central Banks, and Linear Inflation Contracts’

PART II CENTRAL BANKING: HOW TO DESIGN THE MONETARY
ARCHITECTURES

A Central Bank Independence

14. Vittorio Grilli, Donato Masciandaro and Guido Tabellini (1991), ‘Political and Monetary Institutions and Public Financial Policies in the Industrial Countries’
15. Alex Cukierman, Steven B. Webb and Bilin Neyapti (1992), ‘Measuring the Independence of Central Banks and Its Effect on Policy Outcomes’
16. Alberto Alesina and Lawrence H. Summers (1993), ‘Central Bank Independence and Macroeconomic Performance: Some Comparative Evidence’
17. Bennett T. McCallum (1995), ‘Two Fallacies Concerning Central-Bank Independence’
18. Adam S. Posen (1995), ‘Declarations Are Not Enough: Financial Sector Sources of Central Bank Independence’
19. Charles Goodhart and Dirk Schoenmaker (1995), ‘Should the Functions of Monetary Policy and Banking Supervision be Separated?’


B Central Bank Accountability and Transparency

20. Clive Briault, Andrew Haldane and Mervyn King (1996), ‘Central Bank Independence and Accountability: Theory and Evidence’
21. Otmar Issing (2005), ‘Communication, Transparency, Accountability: Monetary Policy in the Twenty-First Century’
22. Sylvester C.W. Eijffinger and Petra M. Geraats (2006), ‘How Transparent are Central Banks?’

C Central Bank Communication

23. Alex Cukierman and Allan H. Meltzer (1986), ‘A Theory of Ambiguity, Credibility and Inflation under Discretion and Asymmetric Information’
24. Marvin Goodfriend (1986), ‘Monetary Mystique: Secrecy and Central Banking’
25. Alan S. Blinder, Michael Ehrmann, Marcel Fratzscher, Jakob de Haan and David-Jan Jansen (2008), ‘Central Bank Communication and Monetary Policy: A Survey of Theory and Evidence’