volume 16, issue 4, P43-59 2000
DOI: 10.1093/oxrep/16.4.43
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Abstract: What is it that monetary policy-makers do and how do they do it? The simple answer is that a central banker moves interest rates in order to maintain steady real growth and stable prices. In this essay, I examine the issues that arise in framing the problem faced by monetary policy-makers. I begin with a discussion of how, over the past decade or so, central banks have been made more independent and more accountable. The result has been the virtual elimination of the inflation bias problem that is caused by po…

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