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Introducing Instruments of Central Bank Accountability in a Monetary Union

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  • Katrin Ullrich

Abstract

With an increasing number of independent central banks, accountability of central banks is also getting more attention. This paper analyses the possibility of introducing instruments of central bank accountability in a monetary union. In our model, monetary policy is influenced by the governments of the member states according to the degree of independence granted to the central bank. Instruments of democratic accountability are introduced which generate different expected losses for a government. The amount of the expected loss will determine the approval of a government to the implementation of a particular mechanism. We show that the agreement between the governments will only be unanimous for the definition of the inflation target of the central bank. Copyright Springer Science+Business Media, LLC 2007

Suggested Citation

  • Katrin Ullrich, 2007. "Introducing Instruments of Central Bank Accountability in a Monetary Union," Open Economies Review, Springer, vol. 18(3), pages 239-262, July.
    • Handle: RePEc:kap:openec:v:18:y:2007:i:3:p:239-262
    DOI: 10.1007/s11079-007-9045-5
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    Cited by:

    1. Mihailov, Alexander & Ullrich, Katrin, 2007. "Independence and Accountability of Monetary and Fiscal Policy Committees," ZEW Discussion Papers 07-044, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Independence; Accountability; Monetary union; E52; E58;
    All these keywords.

    JEL classification:

    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies

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