http://repub.eur.nl/res/aut/14657/ List of Publications en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/12291/ 1999-01-01T00:00:00Z We show that the welfare-improving property of an independent central bank depends on how voters respond to the time consistency problem. Voters' responsiveness to economic problems may provide some flexibility to revise the policy delegation arrangement of the central bank. This may improve social welfare. Preliminary evidence on voters' behavior in the U.S. is presented, which indicates that voters seem to respond to economic problems in a proper way, taking time-consistency problems into account when making their vote decisions. http://repub.eur.nl/res/pub/12304/ 1996-02-01T00:00:00Z The political interpretation behind the Barro-Gordon model hinges on two assumptions: Inflation and output growth have distributional effects, and policymakers' distributional desires can be represented by a quadratic loss function in terms of output and inflation. In this article we have examined these two assumptions. Our main results are (1) inflation and output growth have significant effects on the size income distribution, (2) if policymakers are only concerned with the income distribution, no inflationary bias will arise; and (3) the Barro-Gordon model may represent a political model in which political parties care about both the size income distribution and output growth. However, the inflationary bias implied by the Barro-Gordon model should not be associated with the political color of the policymakers.