| 来源类型 | Discussion paper |
| 规范类型 | 论文 |
| 来源ID | DP135 |
| DP135 The Advantages of Tying One's Hands: EMS Discipline and Central Bank Credibility | |
| Francesco Giavazzi; Marco Pagano | |
| 发表日期 | 1986-10-01 |
| 出版年 | 1986 |
| 语种 | 英语 |
| 摘要 | It is often argued that the EMS is an effective disciplinary device for inflation-prone countries in the EEC, since it forces policy-makers in these countries to pursue more restrictive monetary policies than they would otherwise. It is not clear, however, why these countries should submit themselves to such discipline. This paper argues that in order to answer this question appropriately, one must consider that EMS membership brings potentially large credibility gains to policy-makers in high-inflation countries: the reason is that not only it attaches an extra penalty to inflation (in terms of competitiveness losses), but makes the public aware that the policy-maker is faced with such penalty, and thus helps to overcome the inefficiency stemming from the public's mistrust for the authorities. We study the conditions under which these credibility gains are larger than the penalties that the policy-maker incurs in equilibrium. When policy-makers attach no value to inflationary finance, we find that they will always prefer EMS membership. When the policy-maker needs revenue from the inflation tax, however this conclusion is not always true. The opposite contention, that EMS membership is an inferior regime for any government that needs inflationary finance is also generally incorrect. The outcome of the welfare comparison depends (i) on the value placed by the policy-maker on seigniorage relative to the discounted output cost of inflation, and (ii) on the tightness of EMS discipline, as measured by the time interval between realignments and by the portion of lost competitiveness that the country is not allowed to recover at realignments. |
| 主题 | International Macroeconomics |
| 关键词 | Competitiveness Credibility Employment Ems Exchange rates inflation monetary policy |
| URL | https://cepr.org/publications/dp135 |
| 来源智库 | Centre for Economic Policy Research (United Kingdom) |
| 资源类型 | 智库出版物 |
| 条目标识符 | http://119.78.100.153/handle/2XGU8XDN/529291 |
| 推荐引用方式 GB/T 7714 | Francesco Giavazzi,Marco Pagano. DP135 The Advantages of Tying One's Hands: EMS Discipline and Central Bank Credibility. 1986. |
| 条目包含的文件 | 条目无相关文件。 | |||||
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