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Monetary Policy, Reputation and Hysteresis

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Grüner, H. Monetary Policy, Reputation and Hysteresis. Journal of Contextual Economics – Schmollers Jahrbuch, 116(1), 15-29. https://doi.org/10.3790/schm.116.1.15
Grüner, Hans Peter "Monetary Policy, Reputation and Hysteresis" Journal of Contextual Economics – Schmollers Jahrbuch 116.1, 1996, 15-29. https://doi.org/10.3790/schm.116.1.15
Grüner, Hans Peter (1996): Monetary Policy, Reputation and Hysteresis, in: Journal of Contextual Economics – Schmollers Jahrbuch, vol. 116, iss. 1, 15-29, [online] https://doi.org/10.3790/schm.116.1.15

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Monetary Policy, Reputation and Hysteresis

Grüner, Hans Peter

Journal of Contextual Economics – Schmollers Jahrbuch, Vol. 116 (1996), Iss. 1 : pp. 15–29

4 Citations (CrossRef)

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Article Details

Grüner, Hans Peter

Cited By

  1. Wirtschaftspolitik

    Literatur

    2006

    https://doi.org/10.1007/3-540-32558-1_12 [Citations: 0]
  2. Wirtschaftspolitik

    Geldpolitik

    Grüner, Hans Peter

    2017

    https://doi.org/10.1007/978-3-662-49286-4_9 [Citations: 0]
  3. Wirtschaftspolitik

    Literatur

    2008

    https://doi.org/10.1007/978-3-540-75800-6_12 [Citations: 0]
  4. Wirtschaftspolitik

    Geldpolitik und Finanzsystemstabilität

    Grüner, Hans Peter

    2018

    https://doi.org/10.1007/978-3-662-58058-5_9 [Citations: 0]

Abstract

Backus and Driffill have shown that reputation has a disciplinary effect on weak monetary policy makers if output shocks are not persistent. In European countries, however, one observes hysteresis in output and employment. The present signaling game examines the effect of hysteresis on the labour market on the results of the repeated monetary policy game. Disciplinary effects of reputation disappear in the presence of hysteresis. Thus, reputation alone is not a sufficient device for establishing monetary discipline. We discuss alternative concepts for central bank credibility which rely on contracts rather than on central bank independence alone.