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Central bank accountability and independence: Are they inconsistent?

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  • Hetzel, Robert L.

Abstract

The language of discretion offers little information about monetary policy beyond the assurance that policymakers always “do the right thing at the right time”. This language renders problematic the reconciliation of central bank independence with accountability. Monetary policymakers should articulate an analytical framework using the language of economics that allows them to respond to the question, “What variables does the central bank control and how does it exercise that control”.

Suggested Citation

  • Hetzel, Robert L., 2012. "Central bank accountability and independence: Are they inconsistent?," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 616-625.
    • Handle: RePEc:eee:jmacro:v:34:y:2012:i:3:p:616-625
    DOI: 10.1016/j.jmacro.2012.02.010
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    References listed on IDEAS

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    1. Robert E. Lucas, Jr., 1980. "Rules, Discretion, and the Role of the Economic Advisor," NBER Chapters, in: Rational Expectations and Economic Policy, pages 199-210, National Bureau of Economic Research, Inc.
    2. Hetzel,Robert L., 2012. "The Great Recession," Cambridge Books, Cambridge University Press, number 9781107011885, September.
    3. Marvin Goodfriend, 1993. "Interest rate policy and the inflation scare problem: 1979-1992," Proceedings, Board of Governors of the Federal Reserve System (U.S.).
    4. Hetzel,Robert L., 2008. "The Monetary Policy of the Federal Reserve," Cambridge Books, Cambridge University Press, number 9780521881326, September.
    5. Selgin, George & Lastrapes, William D. & White, Lawrence H., 2012. "Has the Fed been a failure?," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 569-596.
    6. Robert L. Hetzel, 2008. "What is the monetary standard, or, how did the Volcker-Greenspan FOMCs tame inflation?," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 94(Spr), pages 147-171.
    7. Robert L. Hetzel, 2006. "Making the systematic part of monetary policy transparent," Economic Quarterly, Federal Reserve Bank of Richmond, vol. 92(Sum), pages 255-290.
    8. Richard D. Erb, 1978. "Federal Reserve Policies and Public Disclosure," Books, American Enterprise Institute, number 917993, September.
    9. Gauti B. Eggertsson & Michael Woodford, 2003. "The Zero Bound on Interest Rates and Optimal Monetary Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 139-235.
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    Cited by:

    1. Steven Ambler, 2014. "Price-Level Targeting: A Post-Mortem?," C.D. Howe Institute Commentary, C.D. Howe Institute, issue 400, February.
    2. Jakub Rybacki & Dobromił Serwa, 2021. "What Makes a Successful Scientist in a Central Bank? Evidence From the RePEc Database," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 13(3), pages 331-357, September.
    3. Kevin L Kliesen, 2023. "A Comparison of Fed "Tightening" Episodes since the 1980s," International Journal of Central Banking, International Journal of Central Banking, vol. 19(3), pages 423-450, August.

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    More about this item

    Keywords

    Central bank; Monetary policy; Political economy of money; Federal Reserve System;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit

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