Abstract
Allow me to start off with a general observation. Economists in central banks who are involved in formulating policy and academics who are engaged in studying questions of monetary theory and monetary policy to a large extent occupy the same ground. That, however, is not to say that their relationship is a cosy, neighborly one. They rarely succeed in joining forces or in making the best use of each other’s comparative advantage. Difficulties between them seem to stem mainly from a dichotomy which may also exist in other fields of economic analysis but is perhaps nowhere more acute than here. On the one hand, monetary policy is an important part of macroeconomic policy and cannot be properly analyzed without recourse to macroeconomic theory. This implies the use of stylized facts and abstract models. On the other hand, there is a great deal of institutional detail, differing to some extent from country to country, that has to be taken into account for the actual conduct of monetary policy. Clearly, not all of it is also relevant for economic analysis. The important question is where does the dividing line run between institutional detail that is relevant and that which can be ignored without detriment to the proper analysis of specific monetary policy issues.
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© 1991 Springer-Verlag Berlin · Heidelberg
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Bockelmann, H. (1991). Credibility and Consistent Central Bank Policy: An Insider View. In: Eckstein, Z. (eds) Aspects of Central Bank Policy Making. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-76774-6_4
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DOI: https://doi.org/10.1007/978-3-642-76774-6_4
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