- Central bank independence and public debt policy
- Journal of Economic Dynamics & Control
- Volume | Issue number
- 21 | 4/5
- Pages (from-to)
- Document type
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
The various proposals for the institutional design of the European Monetary Union have drawn fresh attention to the link between monetary and public debt policies. This paper explores the strategic interaction between fiscal authorities setting public debt and the central bank controlling monetary policy. In the absence of political distortions, an optimally designed conservative, independent central bank is sufficient to establish the second best. In the presence of political distortions or with coordination of monetary and fiscal policy, however, also a debt target is needed.
- go to publisher's site
If you believe that digital publication of certain material infringes any of your rights or (privacy) interests, please let the Library know, stating your reasons. In case of a legitimate complaint, the Library will make the material inaccessible and/or remove it from the website. Please Ask the Library, or send a letter to: Library of the University of Amsterdam, Secretariat, Singel 425, 1012 WP Amsterdam, The Netherlands. You will be contacted as soon as possible.