TY  - JOUR
AU  - Blinder,Alan S.
TI  - Central Bank Credibility:  Why Do We Care?  How Do We Build It?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 7161
PY  - 1999
Y2  - June 1999
UR  - http://www.nber.org/papers/w7161
L1  - http://www.nber.org/papers/w7161.pdf
N1  - Author contact info:
Alan S. Blinder
Department of Economics
Princeton University
Princeton, NJ 08544-1021
Tel: 609/258-3358
Fax: 609/258-5398
E-Mail: blinder@princeton.edu
AB  - Central bank credibility plays a pivotal role in much of the modern literature on monetary policy, yet it is difficult to measure or even assess objectively.  A survey of central bankers was conducted to determine their attitudes on two important issues: why credibility matters, and how credibility can be built.  The central bankers' answers are compared with the responses of NBER-affiliated macro and monetary economists.  The two groups agree much more than they disagree. They are particularly united in their evaluations of ways to make a central bank credible -- assigning high ratings to the central bank's track record and low ratings to theoretical ideas like precommitment and incentive-compatible contracts.
ER  -