Why are Federal Central Banks more Activist?

H.J. Roelfsema

Why are Federal Central Banks more Activist?

Research output: Working paper › Academic

Abstract

This paper analyzes monetary policy making by a committee of regional representatives in a currency union with asymmetric shocks. By considering strategic delegation of monetary policy making, we show that regional representatives in a federal policy making committee may be more activist than the average citizen in their district. Hence, in our model federal central banks such as the ECB and the FED respond more aggressively to output shocks when compared to individual central banks.

Original language	English
Place of Publication	Utrecht
Publisher	UU USE Tjalling C. Koopmans Research Institute
Number of pages	19
Publication status	Published - 2006

Publication series

Name	Discussion Paper Series / Tjalling C. Koopmans Research Institute
No.	06
Volume	06
ISSN (Electronic)	2666-8238

Keywords

Central Banking
Asymmetric Shocks
Federations
Strategic Delegation

Access to Document

06-06
Open Access (free)
Final published version, 262 KB

Cite this

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title = "Why are Federal Central Banks more Activist?",

abstract = "This paper analyzes monetary policy making by a committee of regional representatives in a currency union with asymmetric shocks. By considering strategic delegation of monetary policy making, we show that regional representatives in a federal policy making committee may be more activist than the average citizen in their district. Hence, in our model federal central banks such as the ECB and the FED respond more aggressively to output shocks when compared to individual central banks.",

keywords = "Central Banking, Asymmetric Shocks, Federations, Strategic Delegation",

author = "H.J. Roelfsema",

year = "2006",

language = "English",

series = "Discussion Paper Series / Tjalling C. Koopmans Research Institute",

publisher = "UU USE Tjalling C. Koopmans Research Institute",

number = "06",