Government Leadership and Central Bank Design Government Leadership and Central Bank Design

Abstract

Government Leadership and Central Bank Design This article investigates the impact on economic performance of the timing of moves in a policy game between the government and the central bank for a government with both distributional and stabilization objectives. It is shown that both inflation and income inequality are reduced without sacrificing output growth if the government assumes a leadership role compared to a regime in which monetary and fiscal policy is determined simultaneously. Further, it is shown that government leadership benefits both the fiscal and monetary authorities. The implications of these results for a country deciding whether to join a monetary union are also considered. Journal of Economic Literature Classification Nos.: E52, E61, F42.

4 Figures and Tables

Cite this paper

@inproceedings{Hallett2002GovernmentLA, title={Government Leadership and Central Bank Design Government Leadership and Central Bank Design}, author={Andrew Hughes Hallett and Diana N. Weymark}, year={2002} }