Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence
Central bank independence has been championed on the grounds that it avoids political business cycles, the time-inconsistency problem of discretionary monetary policy, and political conflicts. However, after the financial crisis, central banks have resorted to unconventional monetary policies and em...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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De Gruyter
2022-04-01
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| Series: | Economics: Journal Articles |
| Subjects: | |
| Online Access: | https://doi.org/10.1515/econ-2022-0017 |
| _version_ | 1797947781486215168 |
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| author | Campoy Juan Cristóbal Negrete Juan Carlos |
| author_facet | Campoy Juan Cristóbal Negrete Juan Carlos |
| author_sort | Campoy Juan Cristóbal |
| collection | DOAJ |
| description | Central bank independence has been championed on the grounds that it avoids political business cycles, the time-inconsistency problem of discretionary monetary policy, and political conflicts. However, after the financial crisis, central banks have resorted to unconventional monetary policies and embraced additional tasks, making monetary authorities more exposed to political interference. This new reality has put into question the long-lasting consensus on the desirability of central bank independence. We add to this debate a new argument in support of that independence, namely, it internalizes the fiscal spillovers that arise in a monetary union, which is not a full fiscal union. |
| first_indexed | 2024-04-10T21:32:05Z |
| format | Article |
| id | doaj.art-cbf8a62045294640a9509c9b0c63f238 |
| institution | Directory Open Access Journal |
| issn | 1864-6042 |
| language | English |
| last_indexed | 2024-04-10T21:32:05Z |
| publishDate | 2022-04-01 |
| publisher | De Gruyter |
| record_format | Article |
| series | Economics: Journal Articles |
| spelling | doaj.art-cbf8a62045294640a9509c9b0c63f2382023-01-19T13:20:27ZengDe GruyterEconomics: Journal Articles1864-60422022-04-0116112313610.1515/econ-2022-0017Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank IndependenceCampoy Juan Cristóbal0Negrete Juan Carlos1Department of Economics Analysis, Universidad de Murcia, Facultad de Economía y Empresa, Campus de Espinardo, 30100, Espinardo, Murcia, SpainDepartment of Economics Analysis, Universidad de Murcia, Facultad de Economía y Empresa, Campus de Espinardo, 30100, Espinardo, Murcia, SpainCentral bank independence has been championed on the grounds that it avoids political business cycles, the time-inconsistency problem of discretionary monetary policy, and political conflicts. However, after the financial crisis, central banks have resorted to unconventional monetary policies and embraced additional tasks, making monetary authorities more exposed to political interference. This new reality has put into question the long-lasting consensus on the desirability of central bank independence. We add to this debate a new argument in support of that independence, namely, it internalizes the fiscal spillovers that arise in a monetary union, which is not a full fiscal union.https://doi.org/10.1515/econ-2022-0017central bank designmonetary unionfiscal policiesinternational fiscal spilloverse52e58 |
| spellingShingle | Campoy Juan Cristóbal Negrete Juan Carlos Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence Economics: Journal Articles central bank design monetary union fiscal policies international fiscal spillovers e52 e58 |
| title | Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence |
| title_full | Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence |
| title_fullStr | Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence |
| title_full_unstemmed | Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence |
| title_short | Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence |
| title_sort | debt spillovers in a monetary union a novel rationale for central bank independence |
| topic | central bank design monetary union fiscal policies international fiscal spillovers e52 e58 |
| url | https://doi.org/10.1515/econ-2022-0017 |
| work_keys_str_mv | AT campoyjuancristobal debtspilloversinamonetaryunionanovelrationaleforcentralbankindependence AT negretejuancarlos debtspilloversinamonetaryunionanovelrationaleforcentralbankindependence |