Does Conservatism Matter? A Time‐Series Approach to Central Bank Behaviour

Datos Bibliográficos

ID9718360
AutoresHelge Berger (Free University Berlin and CESifo), Ulrich Woitek (0000-0001-5391-1199, University of Zurich and CESifo)
Año2005
Volumen115
Número505
Páginas745-766
Fecha de publicación2005-07-01
Peer ReviewedSí
Open AccessSí
TipoARTICLE
RevistaThe Economic Journal (JOURNAL)
Identificadores de la revistaISSN: 0013-0133 • E-ISSN: 1468-0297
EditorialOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2005.01018.x
OpenAlexW2008937338
IdiomaEN
Citas recibidas10
Referencias citadas35

Empirical studies crediting 'independent and conservative central banks' with lowering inflation and inflation volatility have been criticised for their focus on policy outcomes instead of policies, and for their unsystematic conflation of independence and conservatism. We present results from time-series models for the German Bundesbank that avoid these shortfalls. Conservatism matters in the following sense: ("i" ) more conservative Bundesbank Councils tend to react stronger to changes in inflation and output, and ("ii" ) an increase in conservatism leads to a more activist stabilisation policy. This is in line with simple policy models incorporating economic persistence with implementation lags for monetary policy. Copyright 2005 Royal Economic Society

Central bank · Conservatism · Economics · Financial economics · Great Moderation · Independence (probability theory · Inflation (cosmology · Inflation targeting · Keynesian economics · Macroeconomics · Monetary economics · Monetary policy · Political science · Politics · Volatility (finance · Economic Theory and Policy · Fiscal Policies and Political Economy · Monetary Policy and Economic Impact