Browsing by Subject "Central banks"
Now showing 1 - 4 of 4
Results Per Page
Sort Options
Item Open Access Central bank reform, liberalization and inflation in transition economies-an international perspective(Elsevier BV, 2002) Cukierman, A.; Miller, G. P.; Neyapti, B.This paper develops extensive new indices of legal independence (central bank indepedence (CBI) for new central banks (CBs) in 26 former socialist economies. The indices reveal that CB reform in the FSE during the 1990s has been quite ambitious. In spite of large price shocks, reformers in those countries chose to create CBs with levels of legal independence that are substantially higher, on average, than those of developed economies during the 1980s. The evidence in the paper shows that CBI is unrelated to inflation during the early stages of liberalization. But for sufficiently high and sustained levels of liberalization, and controlling for other variables, legal CBI and inflation are significantly and negatively related. These findings are consistent with the view that even high CBI cannot contain the initial powerful inflationary impact of price decontrols. But once the process of liberalization has gathered sufficient momentum legal independence becomes effective in reducing inflation. The paper also presents evidence on factors that affect the choice of CBI and examines the relation between inflation and CBI in a broader sample. © 2002 Elsevier Science B.V. All rights reserved.Item Open Access Inflation targeting, employment creation and economic development: assessing the impacts and policy alternatives(Routledge, 2008) Epstein, G.; Yeldan, E.Inflation targeting (IT) has recently become the dominant monetary policy prescription for both developing and industrialized countries alike. Emerging market governments, in particular, are increasingly pressured to follow IT as part of their International Monetary Fund (IMF)-led stabilization packages and the routine rating procedures of the international finance institutions. However, the common expectation of IT promoters that price stability would ultimately lead to higher employment and sustained growth has failed to materialize. Generally, the current growth patterns of the world economy are too concentrated and uneven to generate sufficient capital investment and reduce unemployment. To contribute to the task of designing a more socially desirable macroeconomic policy environment, we offer concrete country case studies that devise viable alternatives to inflation targeting central bank policies in order to promote employment, sustained growth and improved income distribution.Item Open Access Introduction to the research handbook of financial markets(Edward Elgar Publishing, 0018-05-20) Gürkaynak, Refet S.; Wright, Jonathan H.This introduction sets the background to the Handbook of Financial Markets; a volume of 22 chapters on the state of different financial markets. It gives a discussion of the historical background to financial markets and the linkages between finance and the broader economy, emphasizing the importance of central banks in modern finance. It explains how the chapters are linked together and are not just a collection of standalone essays. The introduction gives a roadmap of the sections of the book, on central banking, financial intermediaries, money markets, capital markets, and derivative markets; and describes how the book addresses both historical background and recent market developments, as well as highlighting open questions.Item Open Access Macroeconomics of twin-targeting in Turkey: analytics of a financial computable general equilibrium model(Routledge, 2008) Telli, C.; Voyvoda, E.; Yeldan, E.The paper provides an overview of the post-1998 Turkish economy and constructs a macroeconomic computable general equilibrium (CGE) model to illustrate the real and financial sectoral adjustments of the Turkish economy under the conditionalities of the 'twin targets': on primary surplus to gross national product (GNP) ratio and on the inflation rate. We further utilize the model to study three sets of issues: (i) the critical role of the expanded foreign capital inflows in resolving the macroeconomic impasse between the disinflation motives of the central bank and imperatives of debt sustainability and fiscal credibility of the ministry of finance; (ii) reduction of the central bank's interest rates, and (iii) a labor market reform of reducing payroll taxes. Our simulation results suggest that the current monetary strategy, which involves a heavy reliance on foreign capital inflows along with a relatively high real rate of interest, is effective in bringing inflation down; yet it suffers from increased cost of interest burden to the public sector, and strains fiscal credibility. In contrast, given the ex ante constraints of the domestic economy in the short run, an alternative heterodox policy of reduction of the central bank interest rate and lowering of the payroll tax burden in labor markets indicate strong employment and growth effects along with strengthened fiscal credibility.