A Political Agency Theory of Central Bank Independence

A Political Agency Theory of Central Bank Independence

We propose a simple theory to explain why, and under what circumstances, a politician delegates policy tasks to a technocrat in an independent institution and then analyze under what conditions delegation is optimal for society. Our theory builds on Holmstrom's (1982, 1999) "hidden effort&...

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Bibliographic Details
Main Authors: Eggertsson, Gauti B., Le Borgne, Eric
Format: Journal Article
Language:EN
Published: 2012
Subjects:
Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior D720
Asymmetric and Private Information D820
Central Banks and Their Policies E580
Online Access:http://hdl.handle.net/10986/5680

Internet

http://hdl.handle.net/10986/5680

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