American Economic Review Vol. 90 No. 5 2000
Central-Bank Credibility: Why Do We Care? How Do We Build It?
Abstract
Central bank credibility plays a pivotal role in much of the modern literature on monetary policy, yet it is difficult to measure or even assess objectively. A survey of central bankers was conducted to determine their attitudes on two important issues: why credibility matters, and how credibility can be built. The central bankers' answers are compared with the responses of NBER-affiliated macro and monetary economists. The two groups agree much more than they disagree. They are particularly united in their evaluations of ways to make a central bank credible -- assigning high ratings to the central bank's track record and low ratings to theoretical ideas like precommitment and incentive-compatible contracts.
- DOI
- 10.1257/aer.90.5.1421
- Volume
- 90
- Issue
- 5
- Pages
- 1421-1431
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref