Central Banking, Monetary Policies, and the Implications for Transition Economies

the adaptation of the institutional settings of monetary policy to deal with an emerging market economy had to be carried out in the midst of an unprecedented stabilization effort and, therefore, was particularly urgent and complicated. In many of the transition countries, the transformation effort implied not just changes in procedures but the establishment of a central bank from scratch, a process that involved an important effort, precisely at a time when the whole system was in serious turmoil. While the process of reforms is not yet completed in all the transition countries, an immense amount of progress has been achieved, and many of the transition countries face today monetary and central banking conditions that are close to those of Western economies. In this volume, we collect a number of important contributions that discuss the most burning aspects of the current debates on central banking and monetary policy and draw implications for the postsocialist transition economies. The various papers included in the volume deal with a broad set of related issues, which are highly relevant not just for transition economies but for other emerging markets and for advanced economies as well. The subjects covered in the book are divided into seven major categories (Sections II to VIII), some of which overlap.

Klappentext

The polemic about the proper role of monetary policies and the appropriate functions of central banks has received renewed stimulus from a number of very current events. In Europe, the creation of a supranational central bank has been realized. In the United States and other industrial as well as emerging countries, the attributes and functions of central banks have been the subject of lengthy debates. Professional interest has also been centered recently on the issues of exchange regimes and the proper targeting for monetary policy. The various papers in this collection deal with this broad set of monetary and central banking issues, and draw implications of high relevance for post-socialist transition economies. These implications, however, are also important for other emerging markets and for advanced economies as well. The major subjects covered are classified within the following five categories: 1) The definitions, meaning, and results of central bank independence. 2) Goals and objectives of central bank operations. 3) Central banks and financial sector soundness. 4) Capital mobility, currency crises, and the role of capital controls. 5) The implications of European Monetary Unification for transition economies. This book collects the contributions of very well-known experts in monetary and central banking theory and presents the results of original research specially geared to understanding the implications of general economic theory for emerging and transitional economies. The significant and very rapid changes in the nature of good monetary transmission mechanisms require the adaptation of traditional theories to new realities. Such need is most pressing in transitional and emerging countries which lack experience and depth in their financial markets. In this book the particular requirements of these economies are integrated into the main macroeconomic monetary theories. The volume also includes analyses of a number of current issues such as capital flows, currency crises, currency boards, and the implications of European Monetary Union for transition economies.

Inhalt
I Introduction.- 1 Central Banking and Monetary Policies: Major Issues and Implications for Transition Economies.- II Central-Bank Independence.- 2 Central-Bank Independence and Monetary Policy.- 3 Central Banking in a Democratic Society: Implications for Transition Countries.- 4 Central-Bank Independence and Political Business Cycles: A Critical Reexamination.- 5 Political Culture and the Political Economy of Central-Bank Independence.- III Defining Central-Bank Functions.- 6 Central Banking and Economic Development.- IV Central Banks and Financial Soundness.- 7 Central Banks, Asset Bubbles, and Financial Stability.- 8 The Conduct of Monetary Policy and Banking Soundness: A Slovenian Episode.- V Disinflation and the Role of Nominal Targets.- 9 Monetary Policy Strategies for Disinflation: Lessons from Recent Experiences in Transition Economies and Israel.- VI Currency Crises and Capital Controls.- 10 Speculative Attacks and Capital Mobility.- 11 Nascent Capital Flows, Learning, and Chilean-Type Controls.- 12 The Role of the Central Bank in Capitals Account Liberalization: The Case of Croatia.- VII Currency Boards.- 13 Some Reflections or Currency Boards.- 14 The Central Bank of Bosnia and Herzegovina: Its History and Its Issues.- VIII EMU and Transition Economies.- 15 The International Impact of the Euro and Its Implications for Transition Countries.- 16 Monetary and Exchange-Rate Policy of Transition Economies of Central and Eastern Europe After the Launch of EMU.