Essays on the Making and Implementation of Monetary Policy Decisions

According to the recent book by Professor Alan S. Blinder "The Quiet Revolution. Central Banking Goes Modern", published in 2004, "...one of the hallmarks of the quiet revolution in central banking practice has apparently been a movement toward making decisions by committee, whereas previously the dictatorial central bank governor was more the norm..." (p. 35). The transition to collective decision making requires that monetary policy should be analyzed in a number of additional dimensions. As interest rate decisions are no longer taken by a single individual, a number of issues arise, related for example to an efficient aggregation of diverse preferences of individual decision makers, their beliefs about models of the economy and its likely future development. These issues are addressed in the first part of this book. In the second part, we turn to investigating another institutional aspect of monetary policy making: central bank control of short-term interest rates. Building on the ?new view? on monetary policy implementation, we investigate the optimal mix of monetary policy instruments, designed to efficiently implement collective policy decisions.

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