Publication:
Debt Spillovers in a Monetary Union: A Novel Rationale for Central Bank Independence

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10.1515eco..7.pdf(1.75 MB)
Date
2022-01
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Authors
Campoy MiƱarro, J. C. ; Negrete Mediavilla, J. C.
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Publisher
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Fundamentos del AnĆ”lisis EconĆ³mico
DOI
doi.org/10.1515/econ-2022-0017
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info:eu-repo/semantics/article
Description
Ā©<2022>. This manuscript version is made available under the CC-BY-4.0 license http://creativecommons.org/licenses/by/4.0/ This document is the Published Manuscript version of a Published Work that appeared in final form in Economics, vol. 16, no. 1. To access the final edited and published work see: doi.org/10.1515/econ-2022-0017
Abstract
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.
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Central Bank Design , Fiscal Policies , Monetary Union , international fiscal spillover
Citation
Economics-The Open Access Open-Assessment E-Journal, 16 (1)
URI
http://hdl.handle.net/10201/118643
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