Central Bank Credibility, Reputation and Inflation Targeting in Historical Perspective / Michael Bordo, Pierre Siklos.

Format:

Book

Author/Creator:

Bordo, Michael.

Contributor:

National Bureau of Economic Research.

Siklos, Pierre.

Series:

Working Paper Series (National Bureau of Economic Research) no. w20693.

NBER working paper series no. w20693

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2014.

Summary:

This paper examines the historical evolution of central bank credibility using both historical narrative and empirics for a group of 16 countries, both advanced and emerging. It shows how the evolution of credibility has gone through a pendulum where credibility was high under the classical gold standard before 1914 before being lost and not fully regained until the 1980s. This characterization does not, however, seem to apply to the monetary history in the emerging markets examined in the paper. Nevertheless, credibility in all the economies examined has been enhanced in recent decades thanks to the adoption of inflation targeting. However, the recent financial crisis and the call for central banks to focus more on financial stability relying on macro prudential regulation may pose significant challenges for central bank credibility.

Notes:

Print version record

November 2014.